Note 44 EN
Note 44 : The rental market in Luxembourg
PUBLICATION
Urban Development and Mobility
30 OCT 2025

Recent trends, affordability, and comparison with neighbouring countries

Note 44, which focuses on the rental market and compares Luxembourg, France, Belgium and Germany, highlights an unique situation. Against a European backdrop marked by significant housing pressures, the study emphasises a specific feature of Luxembourg: despite a higher standard of living than in neighbouring countries, private sector tenants in Luxembourg are particularly exposed to constantly rising housing costs.

A marked increase in rents and the rent-to-income ratio

In Luxembourg, overall housing costs (rent + charges) continued to rise faster than incomes. Between 2016 and 2023, the affordability ratio for private tenants rose from 32% to 39%, meaning that nearly 4 out of every 10 euro spent went towards rent and service charges for their accommodation. This is the most significant increase among the countries compared, while affordability ratios have stabilised or fallen elsewhere. Luxembourg is now at a level close to Belgium (40%), but higher than France (34%) and especially Germany (28%).

Graph Note 44

Inequalities based on income and family composition

The study confirms that certain households are particularly vulnerable to inequality in Luxembourg.

· The lowest 20% of households spend more than half of their income on housing (55%);

· The housing cost burden for single-parent families will reach 50% in 2023, and 43% for single adults, making them the most vulnerable groups in the housing market.

Earning more in Luxembourg... but paying more for housing

Despite these tensions, Luxembourg stands out for the high standard of living enjoyed by its private rental households, which is higher than in neighbouring countries. This paradox – higher average incomes but higher housing costs – illustrates the uniqueness of the Luxembourg market. It reflects both the lack of affordable housing and the limited regulation of the rental market, particularly when compared to the situation in Germany.

The findings of this note highlight the importance of continuing to develop affordable housing solutions and regularly monitoring dynamics compared with neighbouring regions and countries.

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Note 44

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