Housing Paradox In One Of The World's Wealthiest Countries: People Crossing Borders Just To Escape Rent?
It is a harsh paradox that even in one of the wealthiest countries, where economic inequities are widening, people are turning to unorthodox means to avoid the prohibitive cost of rent.
Even though certain areas are wealthy and prosperous, the housing crisis is still a serious problem in many industrialised countries, requiring citizens?to take extreme measures to find cheap accommodation.
Which Country Is The Richest One?
Luxembourg's people are among the wealthiest in the?European?Union, and the excessive expense of purchasing or renting a home in the country has made living there practically impossible for some.
Why Are People Facing Problems In This Wealthiest Country?
The three-time mother and teacher, Pascale Zaourou, was forced to wait five years in order to obtain coveted social housing."On the private market, renting an apartment with two rooms costs at least 2,000 euros; it's difficult with only one income," she told AFP at a recent protest in Luxembourg City.
"Affordable housing is scarce, especially for young people and single-parent families," Pascale added.
Antoine Paccoud, a Housing Observatory researcher who analyses statistics to guide government policy, agreed.
"More and more Luxembourgers are crossing the border to live in Germany, Belgium, or France just because rents and property prices are lower," he said.?The situation is startling for a country with a thriving economy built on financial services.
According to EU figures, the net average earnings for a single worker in Luxembourg in 2022 will be 47,000 euros ($49,000), the highest in the EU.
What Is The Average Cost Of The House In Europe?
New-build flats in the capital city sell for 13,000 euros per square metre (about $1,300 per square foot), while older ones sell for 10,700 euros. A property costs an average of 1.5 million euros.?Rents grew 6.7 percent between June 2022 and June 2023, well above the 3.4 percent inflation rate.
According to Philippe Poirier, a political analyst at the University of Luxembourg, housing has become "the question that overshadows all others" in the next legislative elections.
He cited "the scarcity of housing and land, the cost of construction or purchase, and the high rents" as major issues.?The two major political parties aiming to form the next administration have promised to take action.
The Liberal Party of Prime Minister Xavier Bettel has committed to creating a housing super-ministry, taxing empty properties more heavily, and investing more in social housing.?Paulette Lenert, the current coalition government's health minister, is a socialist leader pressing for massive affordable housing expenditures.
What Is The Structural Problem?
However, the fundamental issues with housing are extensive, and fixing them will be difficult.?Paccoud claims that a lack of inheritance tax and mainly symbolic responsibilities have encouraged landowners to sit on their land rather than develop it.
"0.5 percent of the resident population, or 3,000 people, own half of the buildable land," he added.?
"These owners are holding on to their land as long as possible because prices are increasing."?The economic prospects available also attract a large number of international employees, which serves to drive up the cost of the limited housing pool.
People Living In Luxembourg Are Not Citizens Of That Country
Around half of Luxembourg's population is not a citizen of the country.
There is a significant difference in homeownership rates between native Luxembourgers (80%) and foreign residents (50%).
While many Luxembourgers have practically assured jobs working for government agencies, foreigners must contend with a volatile labour market.
"Those at the bottom of the scale in Luxembourg are rather resident foreigners," Poirier said.
According to recent research by the Chamber of Employees, Luxembourg ranks in the top three in the eurozone in terms of the risk of?poverty?for single-parent households with one income, despite high incomes and an official minimum wage of 2,571 euros per month.
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