1. Multilingualism: Luxembourg City is notable for its multilingual culture, where three official languages—Luxembourgish, French, and German—are commonly used in everyday life. This linguistic diversity reflects the city's rich cultural heritage and international population. 2. Green Spaces: Despite being a bustling urban center, Luxembourg City is home to numerous parks and green spaces, including the famous Petrusse Valley and the Parc de la Ville. These areas provide residents and visitors with beautiful landscapes and recreational opportunities, making it a city that values nature alongside urban living. 3. Historical Fortifications: The city is built on a series of fortifications that date back to the 10th century. Many of these historical structures, including the Bock Casemates, are UNESCO World Heritage Sites. These fortifications not only add to the city's historical charm but also offer stunning views of the surrounding areas.
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.
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, 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