Editorial - The housing race

By Audrey SomnardLex Kleren Switch to French for original article

The property crisis is deep. Is it affecting the country's attractiveness?

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Finding accommodation in Luxembourg has long been a headache. First of all, the country is expensive. So be it. High salaries, high GDP as we know it, logically real estate can't be cheap. Everyone complains about it, but does it really matter that much? All you have to do is look up when you walk down the streets of the country's communes or when you travel by bus. Empty plots of land, abandoned houses – while the country has long been an open-air building site, there are also many homes that have been left abandoned. Owners who can afford to let their property rot, because the real value is in land.

What's special about Luxembourg is that, more than anywhere else, property is seen as a particularly profitable investment. Whereas in other countries you buy a property to live in and not pay rent when you retire, here you invest in your house or flat. With insolent growth and untaxed capital gains on your main home, property investment has until now been guaranteed to be risk-free and very, very lucrative. So who would want to kill the goose that lays the golden eggs? Admittedly, the entry ticket is high, and reserved for a certain elite, the high earners in finance and the lucky ones who inherit tax-free, but the result is there. Owners who don't want things to change, because the value of their property is the driving force behind their wealth.

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