Luxembourgh Times
Housing crisis

Luxembourgers flock across borders for cheaper housing

Locals see housing squeeze as main issue, ahead of Covid-19, climate or job security

At least the street name reminds you of home: construction in Winchering, Germany, just across the border

At least the street name reminds you of home: construction in Winchering, Germany, just across the border © Photo credit: Guy Jallay

By Thomas Klein and Yannick Lambert

An increasing number of Luxembourgers are moving across the border or thinking of doing so as they struggle to afford a place to live inside the country, which saw house prices soar by 17% last year alone.

Over 70,000 Luxembourg citizens already live in the neighbouring countries Belgium, France and Germany, with the top destination being France, which houses 28,000 inhabitants from the Grand Duchy.

The many yellow license plates in towns and villages across the border indicate that many stay registered in Luxembourg, often via relatives, so that they can continue to have their kids schooled in Luxembourg, for instance.

The average price of a house in or around Luxembourg City stands at €1,35 million, according to statistics agency Statec. The further away one chooses to live from the capital, the cheaper real estate generally gets, but the national average for a house is still around €900,000.

A total of 78% in a Politmonitor survey in autumn 2020 said they worried about the rapidly rising property prices in the country, making it the primary concern of residents ahead of Covid-19, climate change and job security.

Concerns are the highest among the young generation of 18 to 24 year olds - who have lower income. In that age group, a full 84% expressed concerns about the lack of affordable housing. A study from 2020 showed that Luxembourg's poorest spend more than 40% of their income on rent.

In the 2018 election, housing was already also the most pressing issue for voters.

Attractive Moselle region

On the German side, the Trier-Saarburg district near the border is particularly popular. The number of Luxembourg citizens in that area has almost doubled to 4,430 in 2020, from 2,295 in 2011.

Luxembourgers wanting to buy or build a house are primarily interested in the Moselle locations right on the border, said Walter Voigt, who has his own real estate brokerage.

"Luxembourgers are currently acquiring construction building land primarily in Wincheringen, Merzkirchen, Nittel, Perl and Palzem," said Raimund Müller, managing director of real estate agency Immobilien Müller from Trier.

"Most of them continue to do their well-paid job in Luxembourg and have their friends and relatives there. Proximity to the border is therefore a decisive factor for many."

This influx has caused prices to increase in the areas neighbouring Luxembourg, given their attractiveness to cross-border commuters. Luxembourgers are relatively wealthier than locals, and real estate brokers in the Moselle towns are keen on attracting them. The website of the new development area Auf Mont in Wincheringen, for example, explicitly advertises its proximity to the border and the "fast connection to Luxembourg City" .

Housing squeeze

Projections by the Statec national statistics agency suggest Luxembourg needs at least 5,600 new housing units each year, given that it has the highest population growth in the EU.

The government aims to deliver 4,000 affordable housing units by 2025 through a public development fund as the prices are climbing without end in sight.

Using more wood for building could accelerate the process, but Luxembourg faces bureaucratic hurdles. Last year, major housing plans in Kirchberg were nixed by a court over environmental concerns.

The government and lawmakers are currently also working on a law that would support councils more to build affordable housing and give the state more leeway to intervene. Another law overhaul would see renters better protected.