In Europe, the road to obtaining an apartment is the most difficult in the Czech Republic. It was difficult before the pandemic, and it seems to be even more difficult now. Prices for apartments and houses in Prague and other major cities are skyrocketing.
According to the Property Index study by the consultancy firm Deloitte, Czechs have to work 11.4 years for an average salary to buy their own apartment with an area of 70 square meters.
Germans will reach comparable housing in 5.1 years, Poles in 7.7 years and Hungarians in 7.6 years. The situation in Prague is even more serious.
In the unavailability of housing, neighboring Austria is approaching the Czech capital, where ten average annual wages are needed to buy an apartment, and Slovakia, where it is 9.9 wages.
The latest apartment price data is from the third quarter of last year. Prices have continued to rise sharply despite the coronavirus pandemic. The price of houses and apartments rose 4.9% in one year.
The average price of an apartment in m² is 70,300 CZK. The apartment with an area of 70 square meters will cost almost 5 million CZK.
With rising inflation, it is increasingly likely that the Czech National Bank will raise interest rates, making mortgages more expensive, which has made people want to buy houses and apartments while ‘they are still low.
The Czechs have long been one of the countries where a large part of the population lives in and aspires to own apartments. At the same time, compared to other countries, there are not enough apartments and little construction. All of this together is the perfect constellation for soaring real estate prices and Europe’s least affordable housing.
There are 460 apartments per 1,000 inhabitants in the Czech Republic. It is below the European average. In neighboring Germany it is 511.8 apartments, in Austria 541 and in Italy 581. Portugal has the most apartments and houses per thousand inhabitants with 582.
The relationship between the number of apartments and their availability is visible at first glance. As a result, real estate prices in the Czech Republic are increasing at an above average rate by European standards.
The poorer the country, the more people own an apartment
The European comparison also clearly shows how insufficient construction in the Czech Republic is. Last year, an average of 3.62 apartments per thousand inhabitants started to be built.
In Poland, where housing is much more affordable, it was 6.18 apartments and in France 6.12. The good news is that construction is picking up speed at least a bit.
The number of people living in their own houses and apartments varies considerably across Europe. The poorer the country, the more people live in their houses and apartments.
In general, the rich west and north of Europe have many more apartment renters than the poorest in the east and south of the continent. In the European Union, 69.7% of people live on average in their own apartments and houses, most of them in poor Romania, where it is 95.8%. It is followed by Hungary with 91.7 percent and Slovakia with 90.9 percent.
In contrast, there are the richest countries in Western Europe. In Switzerland, only 41.6% of people live in their own house or apartment, 51.1% in Germany, 55.2% in Austria and 60.8% in Denmark.
The richer the country, the fewer owners there are.