Housing in Czechia least affordable in Europe
The availability of housing in the Czech Republic is the worst in Europe, with a new flat amounting to 11.3 multiple of an average annual income, suggests a study carried out by the international consultancy Deloitte in 14 European countries. Last year, Czechs needed 10.9 of an average annual income to buy a new 70 m2 flat.
“The demand and prices on the Czech residential market are growing mainly because of the lack of new flats on the market, the mortgage regulation introduced by the Czech National Bank, lengthy approval processes, high taxation and the sentiment of buyers. At the same time, the offer of new flats is very unlikely to increase especially in large cities,” says Petr Hána, Senior Manager at Deloitte’s Real Estate team.
“Other trends typical for the Czech residential market include the boom of institutional investors that enter the market in order to acquire large flat portfolios, or the increasing number of new property development projects designed for rental housing or for student accommodation,” he adds.
According to the latest Deloitte Property Index 2018, Europeans are growing increasingly fond of rental housing. Analysts say the main reasons behind this trend include the increasing property prices and the fact that young people often move to larger cities to study or find a new, more lucrative job.
The study has also compared European cities according to monthly rents. The most expensive city in this respect is the centre of Paris, where people pay on average 26.4 euros per m2, followed by London with 26.3 euros. The cheapest rents are in Ostrava in the north-east of the Czech Republic, with an average monthly rent of six euros per m2.
Prague, with 13.1 euros, came before many other western European cities such as Milan, Frankfurt or Vienna. The Czech Republic’s second biggest city of Brno placed in the last quarter with an average rent amounting to 8.6 euros per m2.