Homeownership Declines in Luxembourg as High Property Prices Shift Demand to Renting

Luxembourg is witnessing a notable decline in its homeownership rate, reflecting a growing trend of residents opting to rent rather than buy amid soaring property prices. Recent data reveals that Luxembourg’s homeownership rate fell from 67.6% in 2023 to around 63.5% by the end of 2024, marking a significant shift in the country's housing landscape.

The main driver behind this change is the persistently high cost of residential properties, particularly in Luxembourg City, where average prices hover near €11,815 per square meter despite recent market corrections. These prices remain among the highest in Europe, fueled by limited housing supply, strong demand from a growing population, and international workers.

The high acquisition costs have increasingly pushed first-time buyers and younger residents toward the rental market, where affordability is moderately better despite rising rents. Furthermore, housing loans have seen a sharp decline due to rising mortgage interest rates, with new residential real estate loan values dropping over 40% year-over-year in 2023, further impeding purchasing power.

Economic factors such as population growth, sustained wage increases, and government incentives aim to stabilize the market, but the immediate effect continues to favor renting over ownership. This trend poses challenges for Luxembourg’s housing policy, adding urgency to initiatives that increase affordable housing availability.

As Luxembourg moves forward, balancing housing affordability and sustainable urban growth remains a crucial policy priority to address the evolving dynamics of the real estate market and ensure broad access to homeownership.

This shift underscores how Luxembourg’s booming property market is reshaping living choices and putting the rental option at the forefront for many residents in 2025.

Read More : Are Luxembourg City property prices going up? (June 2025) – Investropa
Luxembourg Home Ownership Rate

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