Social geographer Antoine Paccoud from LISER warns that unaffordable housing has created deep divisions within Luxembourg society, as rising rents and property prices force people to leave the country or struggle to make ends meet.
The housing crisis remains one of Luxembourg's most urgent challenges, with successive governments facing the reality that fewer residents can afford to live in their own country.
During the recent national week dedicated to over-indebtedness, criticism was raised that Luxembourg is "exporting poverty across its borders", as those on low incomes are increasingly pushed out of the country.
Minister for Housing Claude Meisch does not dispute the seriousness of the situation: "If we want to strengthen social cohesion in Luxembourg, if we want to continue progressing economically, we must ensure that everyone can have a home here, regardless of high, medium, or low income. Society needs everyone."
It is not just the high prices for those seeking to buy a home, but also the rents that are placing a strain on people living and working in the Grand Duchy.
For Paccoud, the damage has already been done: the current situation means that not everyone who works in Luxembourg can actually afford to live there.
The social geographer highlights how the brunt of housing costs falls on the most vulnerable: "We know that people with the lowest incomes, the bottom 20%, on average spend nearly half of their income on housing."
Household composition is also a major factor: "single-parent families and people living alone are much more affected than couples who can pool resources".
Another fundamental divide exists between those born in Luxembourg and newcomers, with an even greater split between EU citizens and third-country nationals.
Third-country nationals, dependent on having a valid residence permit, are required to find housing in Luxembourg itself. Meanwhile, rising housing costs have forced some 15,000 people – including more and more Luxembourgers and EU citizens – to move to neighbouring regions, becoming so-called atypical cross-border workers.
"Poverty, Paccoud puts forward provocatively, "as social exclusion, is exported to neighbouring countries and is no longer considered as existing in Luxembourg".
In his response, Minister Meisch acknowledges that Luxembourg faces a significant challenge in making housing affordable for everyone. "We need more public social housing and affordable homes in the rental market, that is something we are working on."
"But we also need, as current conditions show, options for those with a normal or middle income to be able to afford to buy a home", the minister continues.
"But that isn't always a given today. Banks are becoming more hesitant, prices remain high, and with the current international situation, we fear interest rates may rise again."
Speaking during a visit to the "Metzeschmelz" housing project, Meisch stressed that meeting this challenge requires the involvement of both public bodies and private developers. He called for collective responsibility, noting that in 2025 the government had invested more than double in affordable housing than it did the year before.
