Advertising portal: Rents in Prague have risen by up to 22 percent
Update: 07/01/2023 06:25
Issued by: 07/01/2023, 06:25
Prague – Rents in the Czech Republic rose the most in Prague, only by 22 percent, while in the regional cities it was around ten percent. This follows from the data of the company UlovDomov.cz, which is available to ČTK. However, towards the end of the year, rental prices began to fall.
The rental advertising portal UlovDomov.cz, which, through the services of the Ideal Tenant, takes care of more than 2,000 properties worth more than 12 billion crowns for private owners, states that renting a 2+kk apartment in the capital costs an average of 17,940 crowns. According to the company, the price increase for this layout of the apartment amounted to CZK 2,777, which was a year-on-year increase of 18 percent. Rents for 1+kk (CZK 2,359) and 3+kk (CZK 5,129) apartments in Prague rose by up to 22 percent.
For example, in Brno, the growth of two-room apartments averaged 672 crowns, which meant a year-on-year increase of five percent, but for 2+1 apartments up to 13 percent (CZK 1,703). In Pilsen, names increased by an average of seven percent and in Olomouc between six and 12 percent.
“Even though rents increased last year, the increase in prices in most cities ended up below inflation levels. So it was not a sudden increase in energy prices, as for example in the case of energy prices, which increased by more than 100 percent for some households,” pointed out the head of UlovDomov.cz, Michal Hrbatý.
The price of rentals is increased by the fact that many people no longer buy their own property due to expensive mortgages. “Reducing rates will help stimulate the property market. On the other hand, the rise in rental prices is not bad for the market, because it increases the housing yield for the investor who bought the property,” Marek Padevět, director of PSN residential projects, told ČTK. His words are also confirmed by the marketing and sales director of UBM Development Czechia Alice Slámová, according to whom the increase in demand for rental housing and rent growth will accelerate the return on real estate investments.
The index of the UlovDomov.cz company shows that the monthly costs of own housing in Prague are up to 2.4 times more expensive than rent for an apartment with a size of 60 square meters. For this apartment in Prague after reconstruction, the price per square meter is around 120,000 CZK, and the repayment of a 90 percent mortgage for 30 years according to the current average offer interest rate of 6.77 percent came to about 42,000 CZK per month, while the rental company estimates it to be 18,000 crowns .
However, there is no such difference in regional cities. For example, in Olomouc, according to data from UlovDomov.cz, the rent for a 1+kk apartment is on average 9,422 crowns, and the repayment of a 90 percent mortgage for 30 years at an interest rate of 6.77 percent per year is about seven thousand higher. The prices of rent and loan payments for own housing are the closest in Ostrava, where the ratio of the monthly mortgage payment for an older apartment to the tenant is 1.4.
At the same time, rents fell in the 4th quarter of last year compared to the 3rd quarter. Prices for a 2+kk apartment were 850 crowns lower in the capital, while in Ostrava the drop for a 3+kk apartment was 13 percent (CZK 2,358).
According to experts, further development is difficult to estimate, and according to them, the real estate market would need to build up more. A larger supply would hold down prices, I think Hrbatý. “It would also help if the city districts had a uniform and transparent approach to negotiations with developers,” said Dana Bartoňová, business director of YIT Stavo, about the situation in Prague.