In the fourth quarter of last year, the average rent in the Czech Republic was CZK 16,576, down four percent quarter-on-quarter and year-on-year. The changes in rents, however, vary according to the layout and location of the apartments. Traditionally, rents were highest in Prague. In 2022, rental prices were lower and were driven up by the lower availability of owner-occupied housing.
Rental prices rose by one to six percent year-on-year in most cases. However, some apartment layouts, or apartments in some regional cities, outperformed the average. “The analysis showed a rise of between one and eight per cent in Prague specifically. In absolute terms, we are talking about a price increase from CZK 340 to CZK 1,490. What stands out from the average is the eight per cent year-on-year increase in the 2+kk layout, which we explain by the considerable popularity of this layout. I do not consider the price increase in rents, which last year was mostly in the hundreds of crowns, to be dramatic,” said Michal Hrbatý, executive director of UlovDomov.cz.
People currently pay CZK 20,300 to rent a 2-bedroom apartment in the capital. At the beginning of autumn it was CZK 19,150. A one-room apartment costs roughly CZK 14,500 and a three-room apartment between CZK 25,000 and CZK 29,000. According to the analysis, the price even decreased between the third and fourth quarter for some layouts. Specifically, the 3+1 layout by four percent and the 1+kk layout by one percent.
According to the analysis, the development in Brno was similar. Year-on-year, rents rose by between two and nine percent, while prices fell for 1+1 and 3+1 layouts. In Ostrava, a 2+kk apartment can be rented for approximately CZK 11,300. Ostrava flats in the sample also became more expensive year-on-year, but quarter-on-quarter rents were rather stagnant.
According to the analysis, the difference when comparing monthly rent payments with mortgage payments at current rates and prices per square meter is the same as at the beginning of autumn. To buy an apartment in Prague after reconstruction and in good condition, the price per square meter would be around CZK 122,000, according to the analysis. A mortgage payment of 90 per cent of a 30-year mortgage at an average interest rate of 6.25 per cent per year would be around CZK 40,500 for a 60 sqm apartment. The rent payment in the autumn was twice as cheap as the loan repayment of an apartment bought on credit. Swiss Life Hypoindex data show that the average mortgage rate fell to 5.96 per cent at the beginning of January from 6.02 per cent in December.
“The combination of facts, when mortgages did not manage to become cheaper during last year and, for example, older flats were already slightly more expensive, led to an increase in the monthly payment of tens of crowns for smaller loans. In the case of larger loans above CZK 5 million, there was an increase of hundreds of crowns, which practically matched the movement in rental prices and the index remained at similar values as it was at the beginning of autumn,” Hrbatý added.
The UlovDomov.cz index does not take into account the initial cost of the loan or the fact that living in rented accommodation does not mean putting money into one’s own property. According to the index, the costs of owning and renting housing are currently closest in Ostrava.
Source: UlovDomov.cz and CTK
