Rising Apartment Prices Push People Into Expensive Rentals — How Much Does a 2+KK Cost in Prague?
Czechs traditionally prefer living in their own property, but rising apartment prices are driving many into costly rentals. Today, owning a home or apartment is becoming increasingly difficult, especially in Prague, where prices are at record highs — the average market price per square meter of living space is around CZK 75,000. One of the main reasons is the lack of quality housing. The permitting process for new apartments and family houses is extremely slow, and high demand — fueled by low bank interest rates that make investment in real estate attractive — cannot be satisfied by the limited supply.
People are also being pushed into rental housing due to the Czech National Bank’s restrictions on mortgage lending. The standard mortgage covers up to 85% of the property’s value, leaving clients to finance the remaining 15% from their own resources or through other, often expensive, loans. On top of this, buyers must pay an additional 4% real estate acquisition tax, which has been the buyer’s responsibility since November 2016. As a result, many people simply cannot afford a mortgage and must turn to renting instead.
The Pace of Rent Growth in Prague
Rental prices are rising even faster than apartment sale prices — over the past six months, rents in Prague have increased by 5.6%, while sale prices rose by “only” 3.8%. Rental demand is particularly strong in large cities, where people move for work or tourism. Rents are growing fastest in Prague and the Hradec Králové Region (which includes popular mountain resorts such as Špindlerův Mlýn).
Because rental income often (and in Prague almost always) covers the cost of a mortgage, buying property for investment and rental purposes has become increasingly common. Up to 35% of new apartments are purchased for short- or long-term rentals. This trend mirrors that of Western Europe, where rental living far exceeds homeownership.
The highest demand is for newly built or fully renovated apartments. Nearly one-third of all rental properties are 2+KK apartments, where the rent averages around CZK 300 per m². For a 50 m² apartment, that translates to a monthly rent of CZK 15,000 plus utilities.