Czech students and dormitories under pressure as rental inflation surges

Amid rising inflation, higher rent prices, and increasing demand for housing across Czechia, home students in the country are turning away from renting in the private sector and opting instead to live in student dormitories or with family.

Around 300,000 Czech students are enrolled in universities around the country, as reported in Deník N. Rampant inflation and living costs have made them rethink their accommodation options to ease financial pressure.

Rental prices causing stress

Living costs are high, and times are tough for students. National inflation in September was at 18 percent according to the Czech Statistical Office, the highest rate since December 1993. Electricity and natural energy in the same month posted year-on-year average inflation rates of 37.8 percent and 85.9 percent respectively. Food inflation in September rose by 21 percent: the highest rate in the country’s history.

Together with a sharp increase in the everyday cost of living, surging house prices have bitten students hard. The average rental price per square meter in the Czech Republic increased by almost 11 percent year on year in the summer, according to Realitymix.cz, a real estate website.

Combined data from Eurostat and the Czech Statistical Office also show that house prices grew by 24.7 percent year on year in March 2022. Knight Frank, a global real estate company, says that this continued in the second quarter, with Czechia posting annual growth of 24 percent.

A 2022 meta report by consultancy firm Deloitte placed the Czech Republic as the least affordable country in the whole of Europe for home ownership, with Czechs needing an average of 13.3 gross salaries in order to purchase a new home.

In September, with students joining the rental market, rental prices increased notably. Real estate firms reported rental inflation of up to 30 percent year on year in the capital.

The trend of rising house prices has been prevalent for a while: studies by the OECD have found that domestic real estate prices have climbed by almost 90 percent in the country in the past six years. 

These rising housing costs have driven up rental expenses for students. The Czech Technical University in Prague reports that it has increased the price of living in all its dormitories by about 15 percent from the previous year, as reported by Deník N.

In June, Charles University increased dormitory fees by 9 percent, and Masaryk University earlier this year rose its prices by between 600 and CZK 1,000 per bed, per month.

Similar price increases have also occurred at the University of Chemistry and Technology in Prague (VŠCHT). Director of the Special Purpose Facilities Administration, Stanislav Starý, said that dormitory accommodation increased by 11.5 percent in the spring.

The Prague University of Economics and Business (VŠE) also announced plans to increase dormitory rental prices by an average of 10 percent in the winter semester. The Silesian University in Opava increased the price of its most popular dormitory by almost 30 percent before the beginning of the academic year, according to Magazín Patriot.

"Unfortunately, we had to increase prices for this academic year, especially due to the dramatic increase in energy costs. After all, even after the announced ceiling on energy prices, we expect an almost sixfold increase in payments for the gas with which the dormitories are heated,” a spokesperson for the university said.

University dormitories’ price rises are not reducing student interest, though. In fact, many universities are reporting record demand in their accommodation offerings, with many simply unable to house all applicants.

The University of West Bohemia has reported full capacity in its dormitories. Šárka Stará, a spokesperson for the university, told Deník N that “we believe that the interest in dormitory accommodation has increased due to the increase in the price of subletting by private accommodation providers.”

Charles University has experienced the same. “The dormitories are currently occupied, interest is higher this year than in previous years," Šárka Bukwajová, a representative from the university, told Deník N. 

Demand far outstrips supply. Over 8,000 students are enrolled at the University of Ostrava, with the university’s dormitories offering a maximum of 529 places, as written in Magazín Patriot. The Silesian University in Opava offers 342 dormitory beds in Opava, but has about 4,00 students in the region.

Heightened interest – despite the elevated prices in rent – indicates that price inflation in the more-expensive private sector is even less tolerable.

Paired with the abolition of Covid-19-related entry restrictions into the country, the resumption of tourism, and inflows of Ukrainian refugees, demand for accommodation has increased dramatically despite the price increases.

With demand increasing, supply is becoming more scarce. Pilsen, for example, had 37 percent fewer student apartments larger than 70 square meters in August 2022 compared with the year-earlier period, as written in Euro.cz. Brno similarly registered a decline of 30 percent for student residences. In Prague, the number of available apartments of this size declined by more than half.

According to real estate firm Bezrealitky, numbers of people in Czechia searching for rented accomodation in September was four times higher compared to that in March.

The amount of new building units constructed in the country is also not keeping up with demand. Filip Kubus of homeland.cz writes that Czechia "has been struggling with a shortage of housing units for a long time" and explains that "bureaucracy, lengthy construction permitting processes" are to blame for low output.

For many Czech students, living at home and commuting to university has simply become more viable.

"I live 70 kilometers from the university and commute a little over an hour to school daily. It would definitely be more pleasant to live in the city and save time, but with the increase in prices and rents, it is more advantageous to give up this luxury," said Masaryk University student Lucie Vodičková to Deník N. 

For a weekly purchase that used to cost me CZK 1,000, now I will pay CZK 1,500," remarked a student at the University of West Bohemia. "I have to think about every expense now, I go to work more," he remarked.

According to the Invisibles (Neviditelní), a student-welfare organization in Czechia, a university student in the country receives about CZK 6,000 per month, but average monthly expenditure can be as high as CZK 10,000. The company also found that about 12,000 students nationwide have to fund their living entirely, or for the most part, on their own during their studies via part-time work.

Scholarships are available, but are not in particularly high supply: the Invisibles organization estimates that about 10 percent of students receive a scholarship. Institutions such as Chares University offer a scholarship worth up to a total of CZK 7,000, as noted by Denik N, but – given increasing monthly expenditure – even students who receive this may barely be able to keep their heads above water.

Authors of a 2021 study from the Institute for Democracy & Economic Analysis said that "in European comparison, support for socio-economically weak students is at a very low level. Only a very small proportion of students are eligible for publicly funded scholarships, which provide only minimum financial support in any case.”

The study summarized that “academics and politicians have largely ignored” the issue of student funding, leading to the “existing outdated and underfunded system.”

With high national inflation predicted to continue until late 2023 and rental costs expected to increase, the country will likely see higher amounts of students choosing dormitories or living with family over private housing in the near term.