New survey: 80 percent of Czechs struggle to buy their own home

High mortgage rates and increasing property prices have pushed a lot of prospective Czech homeowners out of the market, although optimism is slowly rising. Staff ČTK

Written by StaffČTK Published on 03.10.2023 11:08:00 (updated on 03.10.2023) Reading time: 2 minutes

According to a survey conducted by the Generali Investments group, 80 percent of Czechs are finding it difficult to afford their own housing this year. This marks an 8-percentage-point decrease compared to the previous year. 

Costlier mortgages

However, the survey also revealed that Czechs are more optimistic about the possibility of owning their own home compared to last year. Despite this tentative optimism, those whose mortgage fixation is ending may encounter problems. For instance, if they took out a mortgage of CZK 5 million five years ago, they would now face an increase of almost CZK 8,500 per month.

The survey, which involved 1,050 respondents aged between 18 and 65 from all regions of the Czech Republic, was conducted by the Ipsos company. It also highlighted that energy prices were a major concern for Czech households last year. However, this year, due to the government's price capping and supplier discounting, only 30 percent of people are worried about this issue. Conversely, the rise in inflation has become a concern for a quarter of the respondents, compared to 21 percent last year.

Things could be on the up, however. The Czech Banking Association reported that in August Czechia's mortgage rate fell to 5.8 percent – the lowest level in the last 12 months.

Czechs want to spend less

The survey also indicated that Czechs are willing to spend less money on housing this year compared to the previous year. In 2022, more than 20 percent of Czech households were willing to pay up to CZK 15,000 per month for housing. This year, that percentage has increased to 22 percent. Additionally, the percentage of Czechs who spend a maximum of CZK 10,000 per month on housing has increased from 34 percent to 38 percent.

Marek Bečička, the director of product and real assets at Generali Investments, noted that five years ago it was possible to purchase a smaller apartment in Prague, measuring 48 square meters, for CZK 5 million. With a mortgage repayment period of 30 years and a loan amounting to 80 percent of the property price, the monthly repayment was around CZK 15,000.

However, this year it would only be possible to buy an apartment measuring 33 square meters for the same amount of money, resulting in the loss of 15 square meters and an increase of around CZK 10,000 in the monthly repayment. Furthermore, the current installment of CZK 24,000 to CZK 25,000, after the end of the fixation period, represents approximately 58 percent of the average net salary in Prague.

The survey also revealed that over two-thirds of respondents believe that real estate prices will no longer increase at the current rate. Around 39 percent of people think that house prices will slow down, while another 22 percent believe that house prices will fall.

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