Luxembourg City is home to the Bock Casemates, a vast network of underground tunnels and chambers that have been used for defense since the 17th century. These tunnels once extended over 23 kilometers and played a crucial role in the city's fortifications.
Luxembourg City is experiencing a significant housing crisis, characterized by high prices and a declining market. The city, one of the most expensive in Europe, has seen a drop in property transactions and prices due to rising mortgage interest rates and economic uncertainty. Despite this, the number of dwellings with approved permits has increased, indicating ongoing construction efforts. The city's residents are predominantly renters, with a high percentage of the population renting their apartments. The government and developers are focusing on building more affordable housing to address the crisis. Initiatives include increasing the number of dwellings with approved permits and exploring ways to make housing more accessible to first-time buyers. The city aims to balance the market by supporting affordable housing projects and ensuring that new constructions meet energy efficiency standards to reduce costs for residents.
Housing cooperatives in Luxembourg City play a crucial role in addressing the challenges of affordability and community integration in the housing market. These cooperatives emphasize communal living, ecological responsibility, and affordability, providing a sustainable and inclusive solution to the housing crisis. Despite their potential, housing cooperatives face significant challenges, including financing difficulties and limited political support. In Luxembourg City, the market share of housing cooperatives is relatively low compared to other European countries. The dominant housing model remains individual living, with social and ecological aspects of neighborhood development having limited status in the public debate. Recent years have seen the emergence of new housing cooperatives, such as Adhoc, Luxembourg’s first non-profit housing cooperative, which focuses on promoting new housing forms and developing cohousing projects. Adhoc has been involved in several projects, including a collaborative housing project in Weiler-la-Tour. The city promotes cooperative housing through initiatives like the NETCO project, a network of collaborative housing programs. Political support is essential for the successful implementation of these projects, and there is a growing recognition of the potential of non-profit housing cooperatives in creating affordable housing.
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