Housing crisis in Luxembourg spilling over to Belgium

Luxembourgers fleeing the housing crisis to neighbouring countries are pushing local prices up and pushing locals out

Last Friday, the Royal Federation of Belgian Notaries - Fednot published a report on rising housing prices in the province of Luxembourg (not to be confused with the country of Luxembourg) in the past five years. According to the report, prices there have jumped by around 21% and this is due to spillover from the housing crisis in Luxembourg country.

In recent years, more and more Luxembourgers have been moving to neighbouring countries to avoid the eye-watering prices of real estate in the Grand Duchy. More than 70,000 people (around 10% of the country’s population) already live across the border in France, Belgium and Germany.

Cross-border gentrification, pushing Belgians away

In the last five years, average housing prices in Belgium rose by about 21%, which is a lot, however, in Luxembourg province prices rose even more - by 25.1%.

Furthermore, researchers found that properties located near the E25 and E411 highways, going into Luxembourg have a higher median price than those located away from the highway within the border region in Belgium. The local administrative capital of Arlon and neighbouring Messansy are generally excluded from the calculations, as they are right across the border from the Grand Duchy and already have inflated prices.

Furthermore, prices of properties on the E411, which is further away from Luxembourg country rose more sharply than those along the E25, suggesting that the spillover is growing and affecting more and more communities. Those on E411 rose by 36%, while those by the E25 rose just 21%.

Researchers have said that the situation is starting to create a problem for Belgian citizens living in the area, as housing is becoming rapidly unaffordable and is pushing them away in what can be described as a bizarre case of cross border gentrification.

Additionally, the Luxembourgish national government has recognised the need to provide services for cross-border citizens. Recently, they announced that they will launch a cross border public transport service, to cater to daily commuters from France. They have described it as a project that aims to reduce emissions.

A handful of people control half of the land in the Grand Duchy

According to Statec, the national Luxembourgish statistical agency, the average rate of an apartment in Luxembourg City is 1.35 million euros. While prices go down the further a property is from the capital, the national average is still around 900,000 euros and prices are continuing to rise.

On top of that, in December, the government published a report saying that half of all land available for construction in the country is owned by 0.5% of the population.

Henri Kox, Luxembourg’s Minister of Housing, explained that the country needs to focus on establishing a robust land mobilization strategy to take advantage of vacant land. According to the study, the 3,750 hectares of available land can support around 142,000 housing units for 300,000 inhabitants.