Rents in large cities in the Czech Republic mostly increased by units of percent year-on-year in the second quarter of this year, but they changed only slightly compared to the previous quarter. In Prague, the year-on-year increase was three percent for one-bedroom apartments and up to 11 percent for three-bedroom apartments. The development was similar in Brno and Ostrava. In Plzeň and Olomouc, however, rents for larger flats became cheaper. In Plzeň, rents for 3+kk flats fell by more than a fifth. This is based on data from UlovDomov.cz, which takes care of 2,500 properties for owners.
The average rent for a 2+kk apartment in Prague is now CZK 18,525. This is almost CZK 3,500 more than for the same apartment in Brno and CZK 7,000 more than in Ostrava. Compared to the second quarter of last year, rents in these flats in the capital and Brno rose by five percent, in Ostrava by six percent, and in Olomouc by nine percent. “The room for year-on-year growth in rental prices for most dispositions across regional cities is a consequence of the state of the housing market. The prices of own housing have reached such levels that households have been looking for rental accommodation,” said Michal Hrbatý, executive director of UlovDomov.cz. The current mortgage interest rates of around six percent remain high for most families and individuals, he said.
Compared to the first quarter, rents fell more often than in the year-on-year comparison. In Prague, for example, it fell by one per cent for 1+1 flats and by four per cent for 2+kk flats. The analysis found more significant decreases in Ostrava, Plzeň and Olomouc, for example a 3+kk apartment in Plzeň became cheaper by nine percent quarter-on-quarter. “The current situation can be described as price stagnation, where the market is waiting for new impulses. These may be, for example, the demand of students who will start looking for housing for the new autumn semester, or a change in the selling prices of flats or the level of mortgage interest rates,” Hrbatý pointed out.
According to the analysis, in the comparison between rental housing and an apartment bought with a mortgage, renting is usually more advantageous. For example, for an older apartment after reconstruction in Prague, which has 60 square metres, the current rent payment can be 2.2 times lower than the loan payment. In Brno, the rent for the same apartment is 2.1 times lower than the mortgage payment, in Ostrava 1.3 times, in Plzeň 1.7 times and in Olomouc 1.8 times. Only in the case of larger flats in Ostrava are the rent and mortgage costs comparable.
Source: UlovDomov.cz and CTK
