Luxembourg, the EU’s wealthiest country per capita, is running headfirst into a very first-world problem — nobody can afford to live there anymore. Yes, the tiny Grand Duchy with a booming finance sector and salaries that make other Europeans jealous is facing a housing disaster that’s starting to resemble a slow-motion social implosion.
With just 660,000 people — smaller than Rhode Island — Luxembourg somehow managed to trap itself in a housing market so broken that even the middle class can’t keep up. Forget the poor. Pascale Zaourou, a teacher and single mom of three, waited five years to get into social housing. Why? Because private market rents for a basic two-bedroom apartment start at €2,000 a month. That’s if you’re lucky.
“It’s just not doable with one income,” she told demonstrators recently.
She’s not alone. Young people, single parents, even working professionals are getting priced out of their own country. Antoine Paccoud from the Housing Observatory says more and more Luxembourgers are packing up and moving to Germany, France, or Belgium — anywhere they can get a roof without selling a kidney.
All of this in a country where the average net salary in 2022 was €47,000. Sounds great until you realize new apartments in the capital go for €13,000 per square meter. Want a house? Bring €1.5 million. Oh, and rents shot up nearly 7% in a single year, doubling the inflation rate.
So what’s going on?
Blame a toxic mix of low taxes, hoarded land, and foreign labor demand. About 3,000 people — just 0.5% of the population — own half the land that could be built on. And why would they sell or build when prices keep going up? There’s no inheritance tax, barely any penalties for sitting on empty lots, and every incentive to do absolutely nothing.
Meanwhile, about half of Luxembourg’s population isn’t even Luxembourgish. And while native Luxembourgers enjoy stable government jobs and 80% homeownership, foreigners are left to fight for scraps in an overpriced rental market — often with little job security and almost no chance of owning property.
According to a recent report, Luxembourg ranks among the worst in the eurozone for poverty risk among single-parent households with one income — despite having the highest minimum wage in the EU (€2,571/month).
Politicians, of course, are making promises. Prime Minister Xavier Bettel wants to create a housing super-ministry and slap taxes on vacant properties. The Socialist Party wants to dump truckloads of money into affordable housing. Sounds great. Will any of it work? That’s the million-euro question — literally.
Because what Luxembourg’s housing mess reveals isn’t just bad policy. It’s the fallout of treating land like a retirement portfolio, housing like a luxury good, and economic growth like a zero-consequence game. The money’s there. The space is there. What’s missing is the political will to shake up a system where the winners are already sitting comfortably — behind walls, gates, and seven-digit price tags.