“Rent in Prague increased by an average of ten percent year-on-year. I have no doubt that it will continue to grow if we do not resolve the long-term imbalance between weak supply and strong demand,” said Pavel Kliment, partner of the consulting company KPMG.
Another consulting firm, Deloitte, also caught a noticeable increase in rental prices. In the second quarter of last year, she calculated the average rent in regional cities at 318 crowns per month per square meter. This year, in the same period, the amount was ten percent higher, i.e. at the limit of 350 crowns per meter.
Converted to a 70-meter apartment, this means a monthly rent of 24,500 crowns. The nationwide average increased year-on-year by 8.5 percent to 305 crowns per meter.
The company calculates the mentioned prices from real estate agency and website offers. However, contracts with real prices are not public and no one keeps track of them.
“Our prediction was confirmed. The slight correction at the end of last year was a short-term phenomenon, rents are growing again and the pace is faster compared to the first quarter,” commented Petr Hána, director of the real estate and construction department at Deloitte.
A comparison with 2014 shows that the ten-year rent has risen roughly as significantly as the average wage. But this is mainly due to fluctuations from the times of the covid pandemic. That’s when apartments that were otherwise used for short-term rentals came on the market, which forced the owners to lower prices.
In recent years, however, rents have been growing faster than wages again, which is also true this year. In the second quarter, the average gross wage rose by 6.5 percent year-on-year, according to the Czech Statistical Office. In its August forecast, the Ministry of Finance expects growth of 7.2 percent this year. Both figures are lower than the current rate of rent growth.
70 applicants for one apartment
Increasing rents is made possible by strong demand. For example, according to the Bezrealitka service, which allows you to rent apartments without the need to use the services of a real estate agent, up to 70 applicants apply for one apartment in Prague, and around 40 in Brno.
“The next generation, especially young households, who are postponing the purchase of their own housing, are heading to the market. On the other hand, the number of interested singles of basically all age categories is increasing,” stated Martin Ponzer, director of Bezrealitka.
The rise in prices does not only concern new tenants. Thanks to extended one-year contracts, even owners of already rented apartments can easily respond to it.
Data from the nascent market of modern apartment buildings will also increasingly be reflected in the averages monitored by analysts. Renting an apartment in them is noticeably more expensive than in the case of older houses. In the 2nd quarter, according to BTR Consulting, the rent was 525 crowns per square meter per month. A model 70-meter apartment thus cost 36,750 crowns per month.
According to predictions, even these apartments will continue to increase in price. “This year, we expect rent growth of around seven percent,” said Zuzana Chudoba, executive director of BTR Consulting.
