New rules from the Czech National Bank with stricter conditions for banks when evaluating client applications for mortgages will drive up rental prices, according to developers and market analysts. In a survey carried out by the Czech Press Agency (CTK), they warned that the middle class will be hit hard by the measures, in particular those living in Prague. “”The rules will limit residential ownership primarily in Prague and will strengthen the position of investors while forcing a lot of potential customers into rental accommodations,” said Central Group’s director Michaela Tomášková. “Rent levels however will rise as a result and people will end up paying more on rent than they would have on mortgage installments.”
M&M finance’s Michal Pitucha told CTK the central bank is being too careful with its new regulations. “If you don’t count Prague, prices for real estate in Czechia are on a relatively low level compared to income. At least compared to the mature part of Europe where owning real estate is far less accessible.”
