People Cross Borders to Escape High Rent in One of World’s Richest Nations

People Cross Borders to Escape High Rent in One of World’s Richest Nations

The people in one of the wealthiest nations in the world, Luxembourg are crossing borders to live in neighbouring countries such as Germany, Belgium or France to seek affordable rent.

Luxembourg faces a dire housing crisis. With sky-high prices for homes and rentals, even people with good incomes find it difficult to secure affordable housing. Residents are moving to neighbouring countries due to more reasonable property costs. Despite Luxembourg’s strong economy, the housing market has created significant challenges.

There are people who have waited five years for social housing, underlining the shortage of affordable options, especially for young people and single-parent families. The issue has led many Luxembourgers to move abroad, despite the nation’s thriving financial services sector.

The housing problem is striking in a country with the EU’s highest average earnings, estimated at €47,000 annually in 2022. In Luxembourg City, new apartments can cost around €13,000 per square meter, while older ones go for €10,700. The average house price is €1.5 million. Rents have surged by 6.7% between June 2022 and June 2023 outpacing inflation.

A lack of inheritance tax and nominal duties has encouraged landowners to hold onto property without development. Around 0.5% of residents, or 3,000 individuals, own half of the buildable land. High demand from foreign workers and the unequal housing market further inflate costs.