The Czech Republic Emerges as Europe’s Second Least Affordable Nation for Homeownership
In terms of property affordability across Europe, the Czech Republic has secured the position of being the second least accessible country for purchasing a residential property. According to the latest Property Index released by Deloitte, it takes an average of 13 gross annual salaries to acquire a 70-square-meter property, a figure that remains largely unchanged from the previous year. Among European metropolises, Prague emerges as the third most expensive city for purchasing homes, trailing behind Amsterdam and Bratislava. The Czech capital necessitates 14.3 gross annual salaries to secure a property. These insights are part of the comprehensive Property Index, accessible via the Czech News Agency.
Deloitte’s Property Index has revealed that Slovakia claims the top spot in terms of least affordability for homeownership, requiring an average of 14.1 gross annual wages for property acquisition. Significantly, the Czech Republic has shifted from its previous ranking as the least affordable nation for homeownership to its current penultimate position. Miroslav Linhart, a senior partner in Deloitte’s financial advisory department, noted, “The latest data show that among all countries, owning a home is the least affordable in Slovakia, where an average of 14.1 gross annual wages is needed to buy one. The Czech Republic, which ranked worst in affordability last year, has now moved to the penultimate position.”
The Czech Republic has observed a general uptick in housing prices, as evidenced in 22 other countries. Specifically, housing prices have surged from €3,342 (equivalent to 80,000 Czech crowns) in 2021 to the current €3,753 (equivalent to 90,000 Czech crowns) per square meter, reflecting a substantial 12 percent increase. The Czech residential market has encountered a significant drop in apartment sales due to the Czech National Bank’s more stringent monetary policy. This has led to a notable slowdown in the mortgage market, with 80,010 fewer mortgage loans closed in the previous year compared to 2021. The total mortgage volume in the past year exceeded CZK 151 billion, marking a substantial 63 percent decrease compared to the preceding year.
Year-over-year, the Czech Republic witnessed a 14 percent increase in the delivery of apartments, mirroring trends seen in other countries like Israel.
Within the realm of rental housing, the Czech Republic maintains a competitive edge compared to other European nations. Prague, where the average monthly rent stands at EUR 14.4 (equivalent to CZK 345) per square meter, holds the 23rd spot out of 66 surveyed cities. Petr Hana, Director of Real Estate and Construction at Deloitte, attributes rising rental prices to heightened demand during a period of housing scarcity. Hana emphasized the burgeoning popularity of rental housing in regional cities and the rising interest from investors and developers in crafting rental-focused projects.
Deloitte’s Property Index further reveals that Belgium and Norway offer the most affordable owner-occupied housing in the EU, where residents need less than five gross annual salaries to purchase a property. Denmark and Slovenia follow suit. Conversely, Israelis grapple with the highest expenses for homeownership, spending an average of EUR 5,701 (equivalent to CZK 137,000) per square meter on new-build homes. On the opposite end of the spectrum, Bosnia and Herzegovina boasts the most affordable new apartments, with an average cost of EUR 1,237 (equivalent to CZK 30,000) per square meter. The Index also notes that France, Poland, and Denmark witnessed the highest number of completed apartments.
Source: ceskenoviny.cz
