Tiny Grand Duchy of Luxembourg faces a major housing crisis

The tiny Grand Duchy of Luxembourg is facing a major housing crisis. 

Protests by residents unable to pay rent or buy a home are increasingly frequent in one of the richest countries in the world, where GDP per capita exceeded 125,000 euros last year. 

"It's nothing new, it's been going on for years, but it's been getting worse over the years," says Jean-Michel Campanella, Mieterschutz Association for the Protection of Tenants. "And in fact, that's because Luxembourg is financially attractive, so you have a lot of people coming to work in Luxembourg, a lot of workforce".

It's a very small and densely populated country but there are other factors that have contributed to the current housing crisis, explains Antoine Paccoud, a researcher at the Housing Observatory service of Luxembourg's Ministry of Housing.  

"The problem is that, for 30 years, all housing production has been geared towards investors, and less and less towards first-time buyers, and now that investors have turned away from housing because of rising interest rates, there's no more production, and the situation is catastrophic."

Luxembourg's prosperity is a powerful magnet for would-be migrants but while the minimum wage exceeds 2,300 euros a month, house prices start at around 10,000 euros per square metre.