A new analysis confirms Luxembourg's status as an economic hub with an enviable quality of life, but warns that high housing costs and inflation are significant burdens for its residents.

According to the "Mapping the World's Prices 2025" study by Deutsche Bank Research, Luxembourg attracts residents with its high salaries and free public transport, yet its status as an economic paradise is tempered by a high cost of living.

The study ranks Luxembourg City among the top five global destinations for quality of life, alongside Copenhagen, Amsterdam, Vienna, and Helsinki. Residents benefit from a safe environment, a generous social system, and enhanced mobility thanks to free public transport.

Financially, the capital rivals cities like Geneva and San Francisco for high net salaries, cementing its status as a premier economic hub. However, this prosperity comes with a significant downside: a cost of living that places a heavy burden on households. Housing costs, in particular, exacerbate inequalities between residents and cross-border workers.

The report concludes that while the Grand Duchy embodies a European success story with undeniable financial and social benefits, it is not immune to the pressures of inflation and a strained property market – structural weaknesses that challenge its idyllic image.