How many salaries does it take to own new property in Czechia?

As new construction remains out of reach in the Czech Republic, many are looking to renovating older housing.

Expats.cz Staff

Written by Expats.cz Staff Published on 27.06.2022 11:56:00 (updated on 12.07.2022) Reading time: 3 minutes

Owning their own home is the dream of the vast majority of Czechs, but only one-third hope to buy a new property. Prices are making people look to older properties instead.

In Prague, a person would have to spend all of their salaries for 17.3 years to buy a new 70-square meter flat, according to the CG-Index compiled by the developer Central Group, or about 2.4 more annual salaries than last year, while five years ago it was 12.7 years.

To come up with the estimation, the index calculated an average gross monthly wage in the metropolis of CZK 50,363 and a new apartment price of CZK 10.4 million.

Currently, the situation across the Czech Republic is not much better, with an average of 15 annual salaries required to buy a flat.

Compared to neighboring countries, people will be able to afford a new apartment in, for example, Berlin, Vienna, or Warsaw in about nine years. According to the CG-Index, it will take almost 15 years in Bratislava.

According to analysts from Česká spořitelna and the portal Europe in Data (Evropa v datech), acquiring one's own housing in the Czech Republic is the most expensive in the European Union, based on earnings compared to property prices.

A separate survey by Stavební spořitelna Česká spořitelna showed that of people planning to buy housing, the largest group of people, 39 percent, would prefer to buy an older apartment or house and then renovate it, while only a third of Czechs are considering a new property. Only 8 percent would choose an adding extension to their parent's or grandparent's home, and another 8 percent would buy cooperative housing.

“Owning housing is still a dream of most Czechs, despite the dramatically reduced accessibility of flats or houses caused by a small supply and rising real estate prices as well as rising mortgage interest rates,” Libor Vošický, chairman of the board of directors of Stavební spořitelna Česká spořitelna, said.

AGENCY PROPERTIES

Apartment for rent, 3+kk - 2 bedrooms, 90m<sup>2</sup>

Apartment for rent, 3+kk - 2 bedrooms, 90m2

Jankovcova, Praha 7 - Holešovice

Apartment for rent, 2+1 - 1 bedroom, 75m<sup>2</sup>

Apartment for rent, 2+1 - 1 bedroom, 75m2

Štěpánská, Praha 1 - Nové Město

Apartment for rent, 3+1 - 2 bedrooms, 110m<sup>2</sup>

Apartment for rent, 3+1 - 2 bedrooms, 110m2

Kořenského, Praha 5 - Smíchov

Apartment for rent, 3+kk - 2 bedrooms, 70m<sup>2</sup>

Apartment for rent, 3+kk - 2 bedrooms, 70m2

Pod dvorem, Praha 6 - Veleslavín

“According to our survey, nine out of 10 Czechs want to live in their own property, in other words, only 10 percent of us do not want it,” Vošický added.

Of those interested in renovating an older property, 59.4 percent said it was because they can't afford a new flat. Some 21.6 percent of people said they would choose an older property because they will get more area for the same price, and 21.4 percent said it was because there were no new properties where they wanted to live. People could give more than one reason, and the desire for gardens and elevators was also mentioned.

To purchase a property, 43 percent would use a mortgage, and 37 percent would use their savings. Another 15 percent would use a building society savings account and 11 percent each would either finance it by selling property or by taking out a loan from a building society.

For the renovation, 44 percent of Czechs would rely on their own savings. A third of Czechs would use a building society saving account or a loan from a building society.

Sustainable technologies are now crucial to any current renovation. People would most often like to install photovoltaic panels and use rainwater. One-third want to pay for it from their own savings and less than a third would rely on the help of subsidies.

Rising electricity and gas prices are forcing Czechs to insulate, change heating habits, and purchase alternative sustainable energy sources. According to the survey, 61 percent of Czechs have reduced consumption and 16 percent are minimizing heat loss via insulation or new windows.

According to analysts from Česká spořitelna and the portal Europe in Data (Evropa v datech), acquiring one's own housing in the Czech Republic is the most expensive in the European Union, based on relative earnings.

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