Luxembourg's residents may be classified as the wealthiest in the European Union, but the sky-high cost of buying or renting a home in the country has made living there nearly impossible for some.

The crisis has become the number one concern in the Grand Duchy of 660,000 people — smaller than Rhode Island, the smallest US state — as it goes to the polls on Sunday.

Pascale Zaourou, a teacher and mother of three children, had to wait five years before being able to access coveted social housing.

"On the private market, renting an apartment with two rooms costs at least 2,000 euros — it's difficult with only one income," she told AFP at a recent demonstration in Luxembourg City.

"Affordable housing is scarce, especially for young people and single-parent families," she said.

Antoine Paccoud, a researcher at the Housing Observatory, which compiles data guiding government policy, backed up that sentiment.

"More and more Luxembourgers are crossing the border to live in Germany, Belgium, or France just because rents and property prices are lower," he said.

The situation is jarring for a country with a flourishing economy based around financial services.

Net average earnings for a single worker in Luxembourg were 47,000 euros ($49,000) annually in 2022, according to estimates from the EU's statistics agency — the highest in the bloc.

'Overshadows all others'

In the capital city, new-build flats sell for 13,000 euros per square meter (around $1,300 per square foot) and older ones go for 10,700 euros. The average cost of a house is 1.5 million euros.

Rents increased by 6.7 percent between June 2022 and June 2023, much faster than the inflation rate of 3.4 percent over that period.

Philippe Poirier, a political analyst at the University of Luxembourg, told AFP that housing has become "the question that overshadows all others" at the legislative elections.