Czechs lower housing expectations amid economic challenges

More than a quarter of Czechs have reduced their housing demands due to rising energy prices, inflation, and interest rates, according to a recent survey by Generali Investments. The study, conducted in September, highlights how economic pressures have shifted housing priorities for many people, though the number of those making such concessions has decreased compared to last year.

According to Generali Investments, the rental housing market has changed significantly since 2019. Five years ago, tenants in Prague could rent a 65-square-meter apartment for the same price they would now pay for a 49-square-meter unit. The data, based on information from the Czech Statistical Office and Deloitte, show the long-term impact of economic instability.

Marek Bečička, Director of Real Assets at Generali Investments, noted that while the economic situation has slightly improved, conditions remain tough. “Energy prices, inflation, and interest rates are still not at pre-pandemic levels, but we’re seeing a positive trend. In 2023, a third of the population reduced their housing demands, but this year only a quarter did so,” Bečička said.

Energy costs remain a primary concern for nearly a third of respondents, though fewer people feel this pressure compared to last year. A tenth of Czechs are now considering downsizing to smaller homes due to energy costs. Inflation affects one-fifth of the population, and high interest rates are increasingly problematic, with more than 9% of respondents citing them as a major issue, up from 2023.

The survey also revealed rising housing costs. Nearly a third of respondents reported paying up to 10% more for housing than last year, with over 30% paying 10% to 25% more, and a tenth of Czechs seeing increases of up to 50%.

Rental prices in the Czech Republic increased by 3.4% in the second quarter of this year, with Prague seeing a 2.3% rise, bringing the average rent to CZK 408 per square meter per month. Meanwhile, mortgage rates fell slightly in early September, with the average rate dropping to 5.38%, according to Swiss Life Hypoindex.

The Generali Investments survey was conducted through Ipsos’s Instant Research application and included 1,050 respondents aged 18 to 65 from across the Czech Republic.

Source: Generali Investments