Luxembourg faces population growth and housing crisis

Luxembourg is facing significant demographic and structural challenges regarding its housing market and population growth. According to the 60th edition of the ‘Luxembourg in figures’ report by Statec, the country’s population reached 691,000 as of January 1, 2026. This represents a steady increase from 634,700 in 2021. Notably, 47% of residents are non-Luxembourgers, with the Portuguese community being the largest foreign group at 88,300 residents.

The housing sector remains a critical issue. The think tank IDEA has released a working paper addressing the housing crisis, which it describes as a structural failure of policy and market dynamics. IDEA identifies soaring prices, insufficient supply, and bureaucratic hurdles as core problems. The paper proposes six actions to expand the policy toolkit, including the creation of a mutual fund for employee housing. However, critics suggest these market-based proposals may prioritize developer interests over social equity and affordability.