How to deal with the Luxembourgish housing market

How to deal with the Luxembourgish housing market

The Luxembourgish housing market is among the most competitive in Europe. Over the past 15 years, the population has nearly doubled, from 300,000 to more than 650,000, driven by international companies and foreign talent after Brexit. Today, over 50% of residents are foreigners, and about 70% of the workforce consists of expats and cross-border commuters. This rapid growth has created a severe housing shortage in Luxembourg and skyrocketing rental prices in Luxembourg City and surrounding areas.

Why the Luxembourgish housing market is so difficult

• Limited availability of rental properties: Especially furnished apartments in the North of Luxembourg are not easy to get.
• Salaries of 2,5 to 3,5 times the monthly rent: With rents starting at € 1.600 in Luxembourg City, this is between € 4.000 and € 5.600 for a 1-bedroom apartment.
• High upfront costs: Deposits of two months’ rent and agency fees (½ month rent plus 17% VAT) remain common
• Long-term rental contracts: Typically one to three years, with strict clauses like repainting requirements if the tenant leaves within three years.

Luxembourgish housing market; rental prices by area (2025)

(Furnished rentals in Luxembourg cost about 25% more.)

How to find a property in Luxembourg?

Finding an apartment in Luxembourg requires careful planning and early action. The process usually starts with defining the budget and preferred location, as rents vary significantly between Luxembourg City and the suburbs.

Most people use property portals such as athome.lu or immotop.lu, but demand is so high that listings disappear quickly.

Agency commission fees (½ month rent plus 17% VAT) are legally split between landlord and tenant, but in practice landlords often try to shift costs back to tenants.

Current Market Trends

• Rental prices in Luxembourg continue to rise by 3–5% annually.
• Vacancy rates remain extremely low (around 2–3%).
• Property owners increasingly favour long-term tenants, making short-term housing in Luxembourg even harder to secure.

Alternative Housing Solutions

• Co-living and shared housing options: Many young professionals resort to co-living in Luxembourg, paying €1,300–€1,500 per month for a single room with shared facilities.
• Government rent subsidies: Available after three months of registration for lower-income brackets.
• Cross-border commuting: Free public transport in Luxembourg since 2020 makes living in neighbouring countries more attractive for EU citizens. However, non EU citizens need an address in Luxembourg!

Tips for HR and Global Mobility managers

• Start home finding in Luxembourg on time
• Set realistic budgets and inform assignees about deposits and monthly costs.
• Use a relocation company for unbiased advice and to speed up searches.

How can Anywr Luxembourg help?

Anywr Luxembourg has assisted hundreds of clients in the past years and in general finds a home for your new employees within 4 weeks. Do you want to know more? Just send me a note on annemarie.wispelweijj@anywr-group.com and we’ll react within 1 business day.