Every third Czech lives in a „panelák“. These blocks of flats made of prefabricated parts are a typical feature of all the former Soviet satellite countries. They were built to last only for two or three generations. Now, their inhabitants are doing their best to prolong their life-span. However, they still pose a serious housing problem for the future.
The Prague City Council plans to raise rents on flats now leased out by the
municipality or city administration at below market rates, councillor Adam
Zábranský (Pirates) told the ČTK news agency in an interview.
Zábranský said the council plans to review the contracts of up to 10,000 flats, many of which are rented out at one-third the going rate “for no apparent reason”.
According to the developer Trigema, as cited by ČTK, tenants of city dwellings usually pay 60 to 120 crowns per square metre, so between 4,680 to 9360 crowns for a standard 78 sq m flat. The market rate would be above 20,000 crowns.
The rise in apartment prices in the Czech Republic, which has been extremely rapid in recent years, has come to a halt or at least decelerated, due to Czechs reaching the limits of their purchasing power as well as new mortgage regulations, iDnes.cz reported. However, things are rather different in Prague, the news site said.
In recent years, Prague has seen a surge in the number of people offering their rooms and apartments for rent. In fact, every fifth apartment in the downtown area is now rented out via Airbnb or similar services, according to a new study. But experts say fears of city centre depopulation may be exaggerated.
The availability of housing in the Czech Republic is the worst in Europe, with a new flat amounting to 11.3 multiple of an average annual income, suggests a study carried out by the international consultancy Deloitte in 14 European countries. Last year, Czechs needed 10.9 of an average annual income to buy a new 70 m2 flat.
It takes Czechs considerably longer on average to save to purchase an
apartment than people in other European states, suggests a new study
produced by consultants Deloitte.
Comparing 12 states last year, the report found that a new flat in the Czech Republic is equivalent to 11.3 years of average pay. Belgians, meanwhile, need the equivalent of 3.7 years’ salary to cover the price of a property of 70 metres squared.
A lack of new apartments on the market is one factor forcing property prices up in the Czech Republic, said a representative of Deloitte. Mortgage regulations, lengthy permit procedures, high taxation and consumer sentiment are other factors.
Czech economic research institute CETA (Centrum ekonomických a tržních analýz) published a study focused on the residential housing market in Prague on Friday, which claims that bureaucratic hurdles, coupled with high demand, are primarily responsible for the current low availability of housing in the capital. It also claims that Airbnb flats, which have been the centre of focus for many councillors, are not to blame.