It is a stark paradox that even in one of the richest countries, where economic inequalities are widening, people are resorting to unorthodox means to avoid the prohibitive cost of rent.
Although certain areas are rich and prosperous, the housing crisis remains a serious problem in many industrialized countries, forcing citizens to take extreme measures to find cheap accommodation.
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- Which country is the richest?
- Why do people face problems in this richest country?
- What is the average cost of a house in Europe?
- What is the structural problem?
- People living in Luxembourg are not citizens of that country
Which country is the richest?
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Luxembourgers are among the wealthiest in the European Union, and the excessive expense of buying or renting a home in the country has made living there virtually impossible for some.
Why do people face problems in this richest country?
Pascale Zaourou, a three-time mother and teacher, was forced to wait five years to obtain the coveted social housing. “In the private market, renting a two-bedroom apartment costs at least 2,000 euros; it is difficult on one income,” she told AFP during a recent protest in Luxembourg.
“Affordable housing is in short supply, especially for young people and single parents,” Pascale added.
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Antoine Paccoud, a researcher at the Housing Observatory who analyzes statistics to guide government policy, agreed.
“More and more Luxembourgers are crossing the border to live in Germany, Belgium or France simply because rents and property prices are lower,” he said. The situation is alarming for a country with a prosperous economy based on financial services.
According to EU figures, the average net income of a single worker in Luxembourg in 2022 will be 47,000 euros ($49,000), the highest in the EU.
What is the average cost of a house in Europe?
Newly built apartments in the capital sell for 13,000 euros per square meter (about $1,300 per square foot), while older ones sell for 10,700 euros. A property costs an average of 1.5 million euros. Rents grew by 6.7 percent between June 2022 and June 2023, well above the inflation rate of 3.4 percent.
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According to Philippe Poirier, a political analyst at the University of Luxembourg, housing has become “the issue that eclipses all others” in the upcoming legislative elections.
He cited “a shortage of housing and land, the cost of building or purchasing, and high rents” as major problems. The two main political parties seeking to form the next administration have promised to take action.
Prime Minister Xavier Bettel’s Liberal Party has pledged to create a super-ministry of housing, tax empty properties more and invest more in social housing. Paulette Lenert, Health Minister in the current coalition government, is a socialist leader pushing for massive spending on affordable housing.
What is the structural problem?
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However, the fundamental problems with housing are extensive and solving them will be difficult. Paccoud says the lack of inheritance taxes and largely symbolic responsibilities have encouraged landowners to stay on their land rather than develop it.
“0.5 percent of the resident population, or 3,000 people, own half of the buildable land,” he added.
“These landowners are holding on to their land as long as possible because prices are rising.” The available economic prospects also attract a large number of international employees, which contributes to increasing the cost of the limited real estate stock.
People living in Luxembourg are not citizens of that country
About half of Luxembourg’s population is not a citizen of the country.
There is a significant difference in home ownership rates between native Luxembourgers (80%) and foreign residents (50%).
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While many Luxembourgers have virtually guaranteed jobs working for government agencies, foreigners must contend with a volatile labor market.
“Those at the bottom of the scale in Luxembourg are more likely resident foreigners,” says Poirier.
According to recent research by the Chamber of Employees, Luxembourg is among the top three countries in the eurozone in terms of risk of poverty for single-parent households with a single income, despite high incomes and an official minimum wage of 2,571 euros a month.
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Source: vtt.edu.vn