By Jesse Colombo (This article is frequently updated)
Luxembourg’s housing bubble is a part of the overall Post-2009 Northern & Western European Housing Bubble that has inflated because of the strong investment inflows that these countries have attracted since the Global Financial Crisis due to their perceived economic safe-haven statuses, serving to further inflate these countries’ preexisting property bubbles that had expanded from the mid-1990s until 2008.
Chart Source: GlobalPropertyGuide.com
The tiny country of Luxembourg has not been immune to the European property bubble epidemic as already lofty property prices have risen 11% since 2009 as mortgage rates fell 2.4% in Q2 2009, in line with ECB key rate cuts, from 4.5% in Q4 2008 [1]. By late 2011, year over year rent prices for houses have exploded by nearly 18% and 8.35% for apartments [2], causing people to flee Luxembourg city in pursuit of cheaper housing.[3] Luxembourg’s soaring cost of housing has caused its residents to sink deeply into debt, with the average household’s level of indebtedness up an incredible 172% since the year 2000. [4]
Luxembourg Housing Bubble Articles List
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