In the Czech Republic, nearly 600,000 apartments remain vacant, yet housing prices continue to soar, making it one of the most expensive markets in Europe.
Housing has become a luxury, increasingly out of reach for young people, despite the adoption of a new law aimed at addressing the housing crisis. Experts argue that while this law is a step in the right direction, it will not be enough to resolve the deeper issues. They recommend that the Czech Republic look to other European nations for successful housing solutions.
Over the past decade, Europe has seen a significant deterioration in housing affordability. Property prices have increased at a faster rate than wages, and rental costs have become unbearable for many middle-class families. The situation appears bleak, with no simple solution on the horizon.
According to the latest Eurostat data, from 2010 to the end of last year, property prices in the European Union rose by over 50 percent, and rents surged by nearly 25 percent. The sharpest price increases were seen in Hungary, Estonia, Lithuania, Latvia, and the Czech Republic.
In the Czech Republic, property prices have skyrocketed by over 140 percent since 2010, making it one of the worst performers in terms of the ratio of apartment prices to average income in the EU.
“Although in 2023, Prague residents needed 14.3 times the average annual salary to buy their own home, compared to 13.5 last year, Prague has fallen in the ranking of housing affordability. After Amsterdam, it now ranks second among the least affordable cities in Europe,” said Petr Hana, director of the real estate and construction department at consulting firm Deloitte, which regularly conducts its own analysis on the issue.
The newly adopted law, which aims to support housing construction, is a step toward addressing the crisis, but experts emphasize that a mere legislative framework is not sufficient.
“The problem of housing affordability is especially relevant in large cities. This is where new residents keep moving. In the past ten years, 100,000 people have moved to Prague. If radical changes don’t occur, the problem will grow proportionally,” explained Jan Klušáček, an analyst from the Social Housing Platform.
Additionally, Klušáček pointed out that the supply of apartments on the market is shrinking. “This is not just a matter of slow construction. Existing apartments are being rented out significantly slower. The fact is that the average age of the population is rising, which practically means that heirs inherit apartments several years later than they did in the past.”
This situation mirrors trends seen in many European metropolises and large cities. However, experts suggest that the Czech Republic could benefit from looking at three key areas where other European countries have implemented successful housing policies.
