The housing ministry on Thursday released a study on household spending on mortgages and rent between 2016 and 2019, carried out by the Observatoire de l’habitat, a body monitoring property prices in the grand duchy.

On average, the amount of household income spent on rent increased from 31% to 37% during this time. But for low-income households--the 20% of least well-off tenants--rent made up 50% of spending.

More than a third of households (34.5%) spent more than 40% of disposable income on housing, the report said. Back in 2016, it was only a quarter. Top earners spent only around 20% of disposable income on rent.

And people who newly rent a property also shell out more. Tenants who had rented their home for under five years in 2019 spent 39.7% of their disposable income on housing. For people who had been renting their property for more than five years, this amount was at 34.5% on average.

“Landlords can take advantage of the change of tenant to adjust the value of the rent to the market price, and the most recent tenants will then tend to suffer more strongly from a price increase, such as that observed in recent years,” the Observatoire said in its report.

Rent for apartments between 2016 and 2019 increased 12.6%, the housing body said, compared to an increase of 9.4% for houses. The price to buy a newly built property rose 20.9% over the same time while the purchase price for an already existing property rose 26.5%.

Roughly two-thirds of households in Luxembourg in 2019 were property owners, but around one-third was still in the process of paying back their mortgage. Only around one third fully owned their home, the report said.

People paying a mortgage spent less on housing than those renting a property, spending 29.5% of disposable income on housing on average.

The increase in household spending was also less marked. While property owners paying back a loan saw spending on housing rise by 3.6% between 2016 and 2019, for people renting, the housing budget increased by 17.5% of disposable income.