The Unassuming Economist

From the IMF’s latest report on Luxembourg:

“With residential real estate prices more than doubling in a decade and (60 percent in the last 4 years),
housing is becoming a key challenge in Luxembourg. Although 2/3rd of households are homeowners,
affordability concerns have been on the rise, including for the middle-income. If continued, these
trends could hamper the country’s competitiveness and attractiveness for workers and pose risks for
financial stability in the medium term. Building on previous IMF analytical work, and looking at the
drivers of the recent housing trends as well as the government’s policies, the paper advocates for a
comprehensive strategy to reduce imbalances in the housing market. The approach includes measures
to: i) boost housing supply (e.g., by mobilizing vacant dwellings and unused land, using existing
resources more efficiently by building more, denser, faster, and at a lower cost), while increasing the
share of affordable homes, ii) contain demand pressure and reduce its geographic concentration,
iii) increase residential mobility, and iv) reduce under occupation. The paper also emphasizes the need
for a more effective and coordinated implementation of reforms.”