Luxembourg

Luxembourg City, as a prominent international financial center and host city for several European Union institutions, has a dynamic and competitive housing market. This market is characterized by a high demand for premium housing, driven by a diverse, high-income demographic, including expatriates and professionals. The city's robust economy, stable political environment, and high standard of living further contribute to its attractiveness for both local and international investors. However, the limited land available for new construction exacerbates the housing shortage, driving up property prices and affecting affordability[1].

Homeownership vs. Renting

In Luxembourg City, only 47.9% of residents are homeowners, which is significantly lower than the national average. Across the country, the homeownership rate stands at 72.4% as of 2022, indicating a strong preference for owning homes over renting[2][5][6]. The rest of the population in Luxembourg City, therefore, either rents their homes or lives in accommodations without paying rent.

Publicly Owned Housing Stock

While specific data on the percentage of publicly owned housing stock in Luxembourg City is not provided, the country faces a housing crisis with sky-high costs for buying or renting homes. This suggests a limited availability of affordable public housing options[7].

Housing Cooperatives

The number of housing cooperatives in Luxembourg City and the percentage of people living in them are not directly provided in the search results. However, Luxembourg has a total of 2,172 Social and Solidarity Economy (SSE) entities, which include cooperatives among other forms. These entities provided 20,390 jobs in 2020, indicating a significant presence of cooperatives and similar organizations in the country[4].

Housing Crisis Impact

Luxembourg City, like many urban centers, has been affected by a housing crisis characterized by a supply-demand imbalance. This imbalance has led to competitive conditions, with properties often attracting multiple offers and sometimes selling for more than the asking price. The limited availability of land for new construction and the city's attractiveness due to its economic and social factors further exacerbate this issue[1].

Support for Non-Speculative Housing

The municipality's efforts to support non-speculative housing include the Housing Pact 2.0, which mandates a certain percentage of affordable housing in new developments based on the size of the project. This initiative is part of a broader strategy to increase the supply of affordable housing in the face of rising prices and demand[5].

Cost Development

Over the last five years, the average costs to rent and buy an apartment in Luxembourg City have seen significant changes. The average selling price for apartments dropped 1.93% to €8,548 per square meter in Q1 2023, marking the first decline since Q3 of an unspecified year. This decline followed a period of rising prices, indicating a cooling of the housing market[5].

Comparison with the Rest of the Country

Luxembourg City's housing market is more competitive and expensive compared to the rest of the country, primarily due to its status as a financial and international hub. The homeownership rate in the city is significantly lower than the national average, reflecting the high demand and limited supply of housing. The country as a whole faces challenges related to housing affordability, but the situation is particularly acute in Luxembourg City due to its unique economic and demographic factors[1][2][5][6].

In summary, Luxembourg City's housing market is characterized by high demand, limited supply, and rising costs, making it challenging for many residents to find affordable housing. The city and national government are implementing measures to address these issues, but the impact of these initiatives remains to be fully realized.

Citations: [1] https://investropa.com/blogs/news/luxembourg-city-real-estate-market [2] https://statistiques.public.lu/en/actualites/population/population/2013/02/20130213.html [3] https://www.themayor.eu/en/a/view/study-luxembourg-has-enough-land-for-housing-but-it-is-owned-by-a-select-few-9475 [4] https://www.oecd.org/cfe/leed/social-economy/oecd-global-action/country-fact-sheet-luxembourg.pdf [5] https://www.globalpropertyguide.com/europe/luxembourg/price-history [6] https://delano.lu/article/delano_most-people-lux-are-homeowners-majority-live-houses [7] https://www.barrons.com/news/luxembourg-eu-s-richest-country-grapples-with-housing-crisis-dfb5a251 [8] https://ec.europa.eu/social/BlobServlet?docId=22285&langId=en [9] https://www.statista.com/outlook/fmo/real-estate/luxembourg [10] https://ec.europa.eu/eurostat/cache/digpub/housing/bloc-1a.html [11] https://www.science.lu/fr/housing-policy/expensive-housing-luxembourg-social-explosive [12] https://investropa.com/blogs/news/luxembourg-buy-property [13] https://www.statista.com/statistics/246355/home-ownership-rate-in-europe/ [14] https://www.luxtimes.lu/luxembourg/affordable-housing-projects-on-the-horizon-over-the-next-ten-years/4614596.html [15] https://chronicle.lu/category/real-estate-services/48220-luxembourg-house-prices-stable-over-2023 [16] https://www.justarrived.lu/en/logement-luxembourg/pourquoi-devenir-proprietaire/ [17] https://www.oecd.org/els/family/PH4-2-Social-rental-housing-stock.pdf [18] https://www.reddit.com/r/Luxembourg/comments/18zwvqi/according_to_real_estate_players_what_can_we/ [19] https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate [20] https://economictimes.com/news/international/uk/luxembourgs-housing-predicament-takes-center-stage-ahead-of-elections/articleshow/104231911.cms [21] https://www.justarrived.lu/en/logement-luxembourg/marche-prix-immobilier/ [22] https://www.statista.com/map/europe/luxembourg/real-estate [23] https://fra.europa.eu/sites/default/files/fra_uploads/251-LU_Housing.pdf [24] https://www.statista.com/outlook/fmo/real-estate/residential-real-estate/luxembourg [25] https://www.arcgis.com/home/item.html?id=f2f9c19c9d8a4aaab93f7eee75e03985