COVID-19 and the Mortgage Market in Luxembourg

With a ratio of household debt to gross disposable income above 150%, households in Luxembourg are among the most indebted in Europe. A high level of debt exacerbates the sensitivity of household net worth to changes in house prices, which can increase the severity of economic downturns. In this note, we evaluate the implications of the COVID-19 crisis for the mortgage market in Luxembourg using data on the labour market and government interventions, as well as surveys of consumer finances (HFCS). Our conclusions are twofold. At the aggregate level, the Luxembourg mortgage market is relatively... Mehr ...