At the end of 2021, 252 projects were funded through a special state development fund--28 of which have registered a public participation of at least €10m--for a total of 3,358 housing units under construction. 568 of these were newly approved during the last financial year, while more than 4,400 dwellings should be delivered by 2026.
The government’s €170m spending in 2021 represents a 77% rise in funding from 2020 (€96m) and is projected to increase to €300m in 2022 and likely to €340m in 2024.
“It is difficult today to draw up a plan to say that we will one day reach annual commitments of €400m or €500m. But my objective is to succeed in reaching, in the long term, the same level as public mobility. That is, more or less half a billion per year,” said Kox at the presentation of the 2021 report.
Affordable housing represented 57% of the projects funded by the so-called “Fonds spécial de soutien au développement du logement” (or special fund to support housing development), marking a slight increase from 2020 when they accounted for 53% of construction funded through the programme.
Luxembourg housing prices are notoriously high and more than doubled in the decade between 2010 and 2020. The average cost of a house in Luxembourg City rose to €1.45m in 2021, said in March, although prices vary substantially depending on size, age and location. Prices grew 13.9% last year as a slightly slower pace than in 2020, when they increased 14.5%.
At the same time, a Statec report has shown that more and more Luxembourgers are , many to live across the border where real estate is cheaper. Housing is likely to be a hot button issue in the 2023 elections. The government in May hosted a on affordable housing to develop and accelerate policy measures.
Prime minister Xavier Bettel (DP) last year had promised a property tax reform proposal by October 2022 to help combat real estate speculation and get empty land and real estate on the market to help alleviate the shortage of available properties.
(Additional reporting by Julien Carette)