Luxembourg City

The Luxembourg City administration is actively addressing the housing crisis through various initiatives. The city owns and rents out 618 affordable housing units, with strict eligibility criteria based on household composition and income caps. Applicants must meet specific conditions, including age, residency rights, and not owning other properties.

The government has introduced reforms to tackle housing delays, including measures to increase affordable housing, simplify permit approvals, and encourage sustainable development. Key changes include allowing construction in activity zones, increasing the percentage of affordable units in new projects, and introducing the "silence means agreement" principle to streamline administrative processes.

Luxembourg aims to create at least 1,200 affordable housing units between 2022 and 2025. The government plans to acquire 800 flats from the private market over the next 3 years to offer at affordable rents, with a budget of 480 million euros. Additionally, the budget for public affordable housing over the next 2 years is nearly 1 billion euros.

Other initiatives include tax credits for landlords, reduced taxes on added value when selling homes, adjusted rent subsidies and state guarantees, and increased tax deduction limits for homeowners. The city is also focusing on sustainable urban planning, as seen in projects like Elmen and Neischmelz, which prioritize quality of life, sustainability, and community spirit.

Luxembourg City's housing market is characterized by high demand and limited supply, leading to elevated prices. As of 2025, the average price for residential properties in the city is €11,969 per square meter for sale, showing a 4.96% decrease from the previous year. Rental prices average €34.36 per square meter per month, a 6.58% increase from 2024.

The city owns 49 housing units, with plans to increase this number through new construction projects. The total housing stock in Luxembourg consists mainly of apartments (52.8%) and houses (45.9%). While specific figures for Luxembourg City are not provided, the country-wide trend suggests more people live in houses than apartments.

Luxembourg City is the center of rental market activity, accounting for over 55% of apartment rental listings in the country. The average advertised rent for apartments in the city was €1,724 per month or €38.56 per square meter in early 2023.

Public and social housing play a role in addressing affordability issues, but their share of the market is not explicitly stated. Housing cooperatives are emerging as an alternative model, offering communal living and potentially more affordable options, though their current market share appears limited.

The city's housing market shows signs of stabilization, with a positive outlook for 2025 due to government measures and decreasing interest rates.