Apartments in Prague will not become cheaper, that is a utopia. The purpose is to allow you to work elsewhere and well
Where people live to live and earn, there are few flats. That’s why it costs so much. But it can be changed.
Where to live, how to live, how to earn an apartment, this is solved by many young people, but also older and old people. Living as a big Czech pain. Last year, the Czech Republic finished second to Serbia in comparison to 22 European countries. According to studies by the consulting company Deloitte, they require 12.2 average gross salaries for a new ordinary, small apartment (for example, 70 square meters). A year earlier, 11.4 of the same was enough. In Serbia we need 15.2 salaries, but in Ireland only 3.1 annual salaries. In Austria 10.6 annual salary, in Belgium 4.2 salary per year. Crazy differences.
People living in the Czech Republic are interested in Czech flats. In recent years, we have constantly heard how huge a problem housing is in connection with work, with employment. I want to live where I can get a well-paid, permanent job if possible. And it follows that the biggest problem is with housing in Prague, where more and more people are moving, where many people commute to work from which villages (which brings hellish traffic jams and parking problems), especially from the Central Bohemian Region.
It is quite clear that apartment prices will not fall in the coming years, apartments are considered one of the most valuable values, an ideal investment in times of uncertainty (pandemics covidu strongly recommend uncertainty and with it again the value of apartments). Over the past five years, the price of apartments in Prague doubled, for normal housing you pay more than 100 thousand per square meter, for luxury (or for that which is only spent on luxury) much more, for example 140 thousand per square meter. For comparison: in the 90s the price was about 25 thousand per square meter.
By the way, the government of Andrej Babiš did nothing positive about it. But maybe she couldn’t. The question is to what extent the government can comply. He has a chance to change the building law, which in our country probably has a very long permit for construction. But on the other hand, let’s say you’re a resident in some part of Prague, and (despite the complicated permitting process) you can see the horrors that are building around you, how harshly the space is thickening. And you say to yourself: how could they allow this? Why is the space for greenery constantly narrowing, vacancies are disappearing, larger and larger buildings are being built on them without the necessary background…
At the same time, it is clear that the absurd prices of flats (absurd compared to the past, not absurd on the market, of course it gives logic there) are related to the simple fact that there are few of them. Where people live to live and earn, there are few of them. That’s why it costs so much.
Left or right solution
Developers see a mistake (especially in Prague) in two basic obstacles: a long building permitting process (about five years), which makes construction more expensive, and an outdated, long unchanged zoning plan (last changed in the metropolis twenty years ago), hence the lack of land, on which to build.
Another important fact plays a role here – we migrate little, we move little for work, we are a very static, sedentary, inflexible society. It has its “Prague” logic, it receives a higher salary in the capital and there is more work there than elsewhere. So you prefer to live there, or settle somewhere around Prague and commute there for work. But commuting is a complication again, there are too many cars, so many people do not commute by train, congestion arises, commuting time and return drag on, the environment suffers from it, etc.
What would help? There are various solutions, “left” and “right”. The left usually offers some restrictions, increase property taxes, properly tax the second and third and other apartments, limit short-term rental apartments, etc. It probably would not help, increase these taxes would probably bring little money to the state treasury, various restrictions can be well done they bypass. Just look around in big cities, how many people, for example, rent apartments illegally, out of taxation.
Moreover, it is nonsense to punish people for thinking about the future (we all know how it will soon turn out with the Czech still unreformed pension system). Investing in an apartment as a source of income in old age is undoubtedly sensible. Putting a higher tax on such flats is nonsense, evil. The apartment today is simply a good, smart investment. (Now I’m not talking about speculators who hold more vacant flats and are waiting for even higher rents, as is the case in Berlin, for example.) – Real solutions, in turn, make it easier to buy land and simplify and shorten the permitting process. Then it will be built more. (In today’s sleep, building materials that have skyrocketed but are more expensive again.) But it can have a devastating effect on the appearance of the city. All sorts of horrors are already being set up today.
Salaries, transport and modern work
Finding an apartment is the biggest problem for young people, they live with their parents for a long time (67 percent of Czechs aged 16 to 29 live with their parents), which is generally perceived as a mistake, even though it seems much more reasonable in the given situation. In Prague, people have to save 31 years for their own housing (an apartment of less than 60 square meters) if they set aside a third of their monthly salary. That doesn’t sound very tempting. When you take out a mortgage on an apartment (which is reasonable, however, if they give it to you, it will be roughly the same as paying high rents), you will become a “prisoner of repayment” for 25 or more years. It limits your feeling of freedom, independence, be afraid to lose your job.
How to get out of it? In the rest of the country, Czechs will save for flats in less time than in 2011, Prague is the most expensive (but you will probably get a good job in it). The theoretical ideal path could be as follows. Salaries in Prague (where by the way it is absolutely the most expensive and it’s not just about housing, but practically everything) gradually compare with salaries in other cities. Approaching Germany is that not everyone has to go there to Berlin, because elsewhere they pay the same for the same work.
Create jobs outside Prague and Brno. At the same time, speed up and make it more comfortable, especially by train, so that it is easy to get around at work, despite what it can’t harm the living space. A crucial moment: finally to change the Czechia from the essence, to change the labor supply, to focus on modern, fine industry, on tourism, to move work (and with it housing) from big cities, to enable teleworking.
Part of this can be a state (for example, traffic, focusing on the track, its speed and quality, the quality of roads, which is terrible, and motorways, which are slowly improving and with considerable suffering for drivers). But a large part of the solution is still on entrepreneurs and their projects, which give people the opportunity to work elsewhere than in the largest cities. It is a utopia to expect apartments in Prague to become cheaper. Not cheap.
Korec: There is a huge shortage of apartments, the price will not go down. Taxation of other flats is nonsense (DVTV video from June 8, 2021)
Prices of average flats will not go down, demand is still rising. The price of flats in Prague has doubled in the last five years, says developer Evžen Korec. | Video: Daniela Drtinová