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 . By late 2011, year over year rent prices for houses have exploded by nearly 18% and 8.35% for apartments , causing people to flee Luxembourg city in pursuit of cheaper housing. 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. 
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