Accelerating housing inequality: property investors and the changing structure of property ownership in Luxembourg

Abstract

This paper tracks the arrival of investors in the housing market of Dudelange, Luxembourg. In so doing, it focuses on the socio-economic changes accompanying the transformation of homes into assets, since the first apartment was built in the city in the mid-1960s until 2018. Drawing on complete land registry data, we chart the structure of apartment ownership in the context of the city’s transition from an industrial to a financialised economy, with particular attention to three characteristics of buyers: age at purchase, country of birth and occupation. We investigate how homeowner characteristics have shifted over time in a context where housing policies have incentivised investor activity and demand. We highlight how three policies put in place in the early 2000s to encourage real estate investments seem to have strengthened the position of the group already most advantaged on the Luxembourg housing market: those born in Luxembourg and over 45 years of age. Given that this group has on average the highest median incomes and the highest homeownership rates, we argue that these policies that incentivised property investments are likely to have accelerated housing (and wider) inequalities in an overheated housing market.