Prague has become the least affordable city in Europe for prospective homebuyers, with a new analysis revealing that purchasing a three-room apartment in a newly constructed building now requires the equivalent of 14.6 annual gross wages. For those considering an older apartment, the price is slightly lower, at 12.1 years of wages. These findings highlight the growing gap between apartment prices and wage increases, with real estate prices surging nearly 150% since 2015, while wages have risen only 62% during the same period.
The data, compiled by investment platform Portu, suggests that this widening disparity is compounded by rising costs for household utilities and energy, further dampening homeownership prospects. According to the Czech Banking Association, the average price of new flats in Prague has reached CZK 142,800 per square meter, significantly higher than the national average of CZK 120,400. This translates to a cost of CZK 10.1 million for a standard 70-square-meter apartment in the Czech capital, making home ownership out of reach for many, especially those earning the average gross monthly salary of CZK 57,000 in Prague.
The situation is even bleaker for individuals outside the capital, where the national average wage stands at CZK 45,854. Even though prices for older apartments are relatively lower—averaging CZK 62,100 per square meter nationally—Prague remains the most expensive city, with secondary market flats priced at CZK 118,300 per square meter.
Portu’s analysis also underscores that rising housing-related expenses exacerbate the affordability crisis. The Czech Republic ranks sixth in Europe for household expenditure on housing, water, electricity, and gas, accounting for 26% of total household spending. Although Czech housing costs have grown at a slower rate than the EU average over the past two decades, they still represent a significant burden for residents. Furthermore, high mortgage interest rates continue to be a barrier, with September’s rates only slightly dropping to 5.38%, leaving many unable to secure loans without a 20% down payment.
In terms of affordability, Prague is followed by Bratislava, where 14 years of wages are needed to buy a home, and Munich, with 11.6 annual wages. Slovakia, Finland, and Denmark also have high housing-related costs, while Montenegro ranks at the other end of the spectrum, with households spending less than 12% of their income on housing.
Portu, founded in 2017, is a technology-investment platform headquartered in Prague, with operations in multiple European cities including Bratislava, Bucharest, London, Milan, and Warsaw. The platform’s findings further highlight the pressing housing crisis affecting not just the Czech Republic, but many parts of Europe as well.
As property prices remain high and wage growth lags, Prague’s residents face increasing challenges in their quest for homeownership.
Source: CTK
