The reasons for this decline in wealth are mainly to be found in the real estate market and on the stock exchange, as the value of investments has declined for those who can afford to invest.
The average net wealth of households in Luxembourg stood at €1.157 million in 2023. Adjusted for inflation, this represents a decline of 18%. Net wealth includes real estate, cars, and other so-called tangible assets, minus debts.
One factor behind this trend is the drop in property prices during that period. However, according to the central bank, access to property ownership has become more difficult. The share of households that owned their primary residence fell from 65.6% in 2021 to 61.7% in 2023. In 2018, that figure was 69%.
At the same time, in 2023, 32% of households owned additional properties besides their main residence.
However, even households that rent their home are usually still car owners. In 2023, 84.2% of households owned at least one car, although this share has been slightly declining, having fallen by almost four percentage points since 2014.
When looking at how wealth is distributed across different population groups, surveys over the years show that wealth generally increases with age until retirement. Households where the reference person is male tend to have more wealth than those where it is female. Couples also tend to have higher wealth than single, divorced, or widowed individuals. Finally, people who rent their home are generally less wealthy than homeowners.
But how do households actually come to their money? Average gross income stood at €125,000 per year, while median income was €96,600, an increase of eight percent compared to 2021. Researchers at the central bank link this development to the fact that 79% of households receive wages that are indexed.
Inequality in the distribution of wealth has hardly changed since 2010, according to the central bank. The richest one percent of households own 13% of total net wealth, while the richest 10% hold almost half of it, at 47%. The bottom 50% of households together account for only 9% of net wealth. Two percent of households had negative wealth, meaning they owed more than the value of their assets.
