A new report from Luxembourg’s Housing Observatory reveals that the financial burden on tenants continues to rise, with nearly four out of every 10 euros now going towards rent and housing-related costs.

In a note published on Wednesday, 30 October, the Observatory found that “despite a higher standard of living than in neighbouring countries, private tenants in Luxembourg are particularly exposed to increasing housing costs.”

Between 2016 and 2023, the share of tenants’ income spent on housing has steadily increased, reaching an average rate of 39%. This means that of every €10 spent, nearly €4 goes towards rent and housing costs.

This places Luxembourg close to Belgium (40%), but above France (34%) and well above Germany (28%).

The report also points to deep inequalities among residents:

  • 20% of households with the lowest incomes spend more than half (55%) of their earnings on housing;
  • Single parents allocate around 50% of their budget to rent and utilities;
  • while single adults spend approximately 43%.

Overall, this leaves the state of Luxembourg's housing landscape seemingly in a paradox.

The Grand Duchy ranks among the countries offering the highest living standards for tenants, largely due to higher average incomes. However, the lack of affordable housing continues to strain residents’ budgets.

The report continues that Luxembourg's rental market "suffers from limited rental market regulation especially compared to Germany." Between 2001 and 2021, 78,000 new households were created in Luxembourg, while only 60,000 new homes were built. This shortfall that has only further exacerbated the housing crisis.

Today, around one in three residents rent their homes, while 66% are homeowners, according to the Housing Observatory.

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