Young people had a chance to save for housing faster. Then came the price jump
At a time that brings with it the historic highest rate of rising real estate prices, it is hard to believe that in 2019 the situation was recording people under the age of thirty who had saved for their own housing.
According to data portal analysis Czechia in data it was easier for young people in the Czech Republic to save on their own apartment than ten years before. The improvement is due to the growth of young people’s incomes.
In all regions, the average savings period for your own apartment over ten years is about 60 square meters lower. The exception was Prague, which traditionally saves the apartment the longest – in 2019 it was 31 years, a year longer than ten years earlier.
On the contrary, in the Olomouc region, the savings period for one’s own housing was reduced by 4 years to 14 years. Back in 2011, it was possible to buy an apartment of 65 square meters in the Olomouc Region for the average price of CZK 1,197,777, and according to the portal’s analysis, people aged 20 to 29 managed to live with a theoretical delay of one third of their own income in 18.4 years. .
By 2019, however, the savings period had been significantly reduced. Even though the same apartment would cost about two hundred thousand more eight years later. A person under thirty could manage to save it with an average income in just 14.2 years.
From the data that the Czech portal used in its data for its analysis and drew from Average earnings information system, shows that the average wage between 2011 and 2019 in the age group increased by almost ten thousand crowns. In 2011, between the ages of 20 and 29, a person earned 19,858 crowns in the Czech Republic. By 2019, however, according to the data, it was already 28,933 crowns. The average income in a specific area was always used for the calculation in individual regions. According to the analysis, the emphasis was also on the difference between salaries and wages in individual regions. Compared to 2019, the average salary in the same age group was even higher than the average wage. The information system on specific earnings states CZK 31,729 per month.
“Every year, we compared the then wage and salary in a given region with the then price of an average apartment (again in the same region). It turned out that, in addition to Prague, young Czechs under the age of 29 saved on flats from average earnings faster in 2019 than in 2011, ”describes Tomáš Odstrčil from the Czechia in the data portal. He added that the last comprehensive data for 2019 are.
This year and last year, however, flats in the Czech Republic continued to become significantly more expensive. Year-on-year growth in real estate prices in the Czech Republic accelerated to 11.9 percent in the first quarter of this year. This was the fourth highest growth in the EU, according to the European statistical office Eurostat. This could erase the “wage” growth of young wages compared to 2019.
Outside Prague, people save for the apartment faster than before
Apartment prices are currently much higher than most young people can afford. According to data from the Czech Statistical Office, the average Prague apartment (with an area of 57.8 square meters) costs approximately 3.6 million crowns. In reality, however, prices can be more than doubled.
Although the highest average wages in Prague and at the same time flats are the lowest on average, Czechs aged 20–29 would save for a flat by postponing thirds of their current earnings. (without the use of mortgages or other tools, editor’s note) over 31 years. Since 2011, this period has increased by less than a year.
“This may seem like minimal growth at first glance, but it is necessary to take into account other parts of the republic. Prague is the only one where the savings period per apartment has increased from average wages since 2019. In the Olomouc region, for example, it fell by 4 years, and in the Karlovy Vary region it was even almost five years old, ”said David Navrátil, chief economist at Česká spořitelna.
Prague is becoming less accessible
In contrast to regions where the average time of savings for their own housing among young Czechs decreased until 2019, in the metropolis it increased. This is also confirmed by the data of the development company Central Group. According to her, the inhabitants of Prague would earn 14.9 years on an average new apartment with an area of 70 square meters if he had no other expenses.
“Housing affordability is declining in all neighboring countries and their metropolises. But Prague is the leaderboard with a big big lead and its distance is still growing. Back in 2014, Prague residents earned the same size as today, which is five years shorter. That is, for as long as now in Vienna, Warsaw or Berlin, which can set an example for us, “said the owner of Central Group, Dušan Kunovský. Despite the fact that the accessibility of young people has been better on average in recent years, it is increasingly difficult to save for one’s own home in the Czech Republic.
According to Central Group’s analysis, the authorities in Prague have allowed only 3.3 flats per 1,000 inhabitants in the last five years.
“Apartment prices in Prague have been growing significantly faster than wages for a long time. While wages have risen by 32 percent since the end of 2014, apartment prices have risen by 97 percent over the same period. The offers are now around 122,000 crowns per square meter. For the same beginning, which in 2014 was enough for an apartment with an area of 70 square meters, today Pražan will buy only about half an apartment, “added Kunovský.
Real estate prices in the Czech Republic are rising by about eight to nine percent every year, and wage growth is generally around three to four percent, according to the Czech Statistical Office.
Investing in young people’s own housing is usually preceded by renting or living in a dormitory. According to the analysis, about 67 percent of Czechs aged 16 to 29 live with their parents. Those who would like a high number can be reassured by the fact that the Czechia is still two percent of its body below the European average, where up to 69 percent of people live with their parents, and more often men stay at home.
It is the gender gap that is even more noticeable than in the case of comprehensive EU statistics. More than three quarters of Czech men under the age of 30 live with their parents, while for women this ratio reaches 58%.
He pays the least for the dormitories in Pardubice
In addition to living with students’ parents, they often prefer to stay in university dormitories instead of renting private flats – they are many times cheaper. “Even for students from Prague who pay the most for dormitories, the average monthly amount will not exceed three and a half thousand crowns. Students with permanent residence in the Pardubice Region, who pay an average of CZK 2,806 for them, pay the least for the dormitories, ”describes David Navrátil, the chief economist of Česká spořitelna.
One of the main reasons for such a choice is the final price of housing. According to Česká spořitelna, the average rent of its clients aged 18 to 24 was CZK 7,777 in the first year.
By paying the rent, this age group loses almost a third of its own monthly income. During full-time university studies, only about 39% of students have a frequent income and another 27% rely on occasional extra income.
Over 1 + kk, young people cannot do without a roommate
According to the data of the real estate agency RE / MAX together with average salaries according to the Czech Statistical Office, you are young people under the age of thirty can easily pay the rent of a studio apartment even 1 + kk, even more expensive ones, even if the prices are significantly higher. in all types of flats than in the rest of the republic.
For more spacious flats, where the Prague rent already makes up over half of this generation, paying roommates, among whom the payment is divided.
By 2019, average rents were growing at a similar pace as wages, but due to the pandemic, they became more accessible across all categories from last year. In addition to the largest flats with more than four rooms, rental prices also fell this year.
Note, 9. 7. 2021, 15:06: We have supplemented the text with more detailed information on the data on the wage analysis of the Czechia portal in the data and specified that the calculations cover the period 2011 to 2019.