Czech Housing is the Least Affordable in Europe, Says New Study

For the second straight year, housing in the Czech Republic has been deemed the least affordable in Europe according to the 2018 Deloitte Property Index

Jason Pirodsky

Written by Jason Pirodsky Published on 04.10.2018 15:38:31 (updated on 04.10.2018) Reading time: 3 minutes

Yesterday, we wrote about the high cost of living in Prague, namely the fact that a 2+1 flat in the city center is now more expensive than the average salary in the Czech Republic.

But it’s not just a Prague that’s facing a housing crisis.

For the second straight year, housing in the Czech Republic has been found to be the most expensive in Europe, according to the new 2018 Deloitte Property Index.

For the study, Deloitte compared the average costs of purchasing a flat or home in 14 countries across Europe against the number of years the average employee would have to work to pay it off.

In Germany, for example, the average employee will earn enough in 5 years to pay off the cost of the average house or flat. Of course, they won’t actually pay it off in 5 years due to other expenses, but it gives you an idea of the amount of time a resident needs to work vs. the cost of their housing.

In Denmark, meanwhile, the average employee will work 4.3 years to come up with the equivalent funds to purchase the average house or flat outright. In Belgium, the number is a mere 3.8 years – – the lowest in the study.

But in the UK, the average employee needs to work 9.8 years to be able to come up with the money needed to purchase housing. France (8 years) and Poland (7.5 years) weren’t too far behind.

And in the Czech Republic, the average employee will need to work a whopping 11.8 years to be able to earn enough money to buy a house – – the highest number in the study, and 59% higher than the average across all 12 countries included.

“The least affordable own housing was for the second time observed in the Czech Republic where citizens needs to save for more than 11 years to buy a new apartment,” the study reads.

Across the Czech Republic, the average house or flat ran 2,162 EUR (nearly 56,000 CZK) per square meter in 2017. That’s a 8.4% increase over the previous year, and third highest among the 12 countries analyzed (Germany saw a 9.6% increases in housing costs, and Poland 9%).

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Among major Czech cities, Prague saw the biggest increase in housing costs at 9.7% year-on-year. Costs also rose sharply in Ostrava (8.8%), and slightly less so in Brno (5.3%).

It’s not all bad news on the Czech real estate market. Among 36 major cities surveyed, rent in Ostrava came in at the cheapest at 6 EUR (155 CZK) per square meter. At 13.1 EUR (338 CZK) per square meter, Prague was the 13th most expensive.

It should be noted that not all EU countries – including Czech neighbor Slovakia – were included in the study.

Still, it’s clear that there’s large discrepancy in the Czech Republic between income and housing costs – – and it’s not a situation that can be entirely blamed on the prevalence of AirBnB in central Prague.

According to Deloitte, a combination of factors including the “continued lack of new apartments on the market, the culmination of regulatory measures by the Czech National Bank, prolonging legislative process, taxation of residential housing, and public sentiment” have all contributed to the current situation on the Czech housing market.

A forecast for the future expects current trends to continue in major Czech cities over the upcoming years.

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