While Luxembourg's residents can be classified as the wealthiest in the European Union, they are increasingly leaving the country as it is becoming impossible to live there. Here's why.
Luxembourg's residents are battling sky-high costs of buying or renting a home in the country, which has made living there nearly impossible for some.?The crisis has become the number one concern in the country of 660,000 people, as per AFP.
For the unversed,?Luxembourg is currently the world's second richest country in terms of?GDP per capita PPP ($142,490).
Pascale Zaourou, a teacher and mother of three children, had to wait five years before being able to access 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 said at a recent demonstration in Luxembourg City.
"Affordable housing is scarce, especially for young people and single-parent families," she said.?Antoine Paccoud, a researcher at the Housing Observatory, which compiles data guiding government policy, backed up that sentiment.
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"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 jarring for a country with a flourishing economy based on financial services.
Net average earnings for a single worker in Luxembourg were 47,000 euros ($49,000) annually in 2022, according to estimates from the EU's statistics agency.
In the capital city, new-build flats sell for 13,000 euros per square metre (around $1,300 per square foot) and older ones go for 10,700 euros. The average cost of a house is 1.5 million euros.?Rents increased by 6.7 percent between June 2022 and June 2023, much faster than the inflation rate of 3.4 percent over that period, as per the report.
Philippe Poirier, a political analyst at the University of Luxembourg, told AFP that housing has become "the question that overshadows all others" at the legislative elections.
He ticked off "the scarcity of housing and land, the cost of construction or purchase, and the high rents" as the key problems.?The two major political parties hoping to spearhead the next government have pledged action.
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Luxembourg's Prime Minister Xavier Bettel's Liberal Party promises to create a super-ministry for housing, wants to tax vacant properties more and invest in social housing.
Socialist leader Paulette Lenert - the health minister in the current coalition government - is pushing for huge investments in affordable housing.?But the structural problems with housing run deep and changing them will not be easy.
Paccoud said a lack of inheritance tax and only symbolic duties have encouraged owners to sit on land without developing it.
"0.5 percent of the resident population, or 3,000 people, own half of the buildable land," he said. "These owners are holding on to their land as long as possible because prices are increasing."
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