Housing in Prague: Europe’s Least Affordable City

Explore the reasons behind Prague's soaring housing costs and discover potential solutions to this pressing issue.

In a recent study published by Politico, it was revealed that Prague has earned the dubious distinction of being the most unaffordable city in Europe when it comes to housing prices. According to the study, residents of the Czech capital would need to save up 25.3 annual salaries in order to afford a 75 m2 flat. This staggering figure far surpasses the affordability levels of other major European cities.

Housing in Prague: Europe's Least Affordable City

Following closely behind Prague is Bratislava, the capital of Slovakia, where a similar-sized flat would require 23.8 annual salaries to purchase. This trend of unaffordability has been on the rise in recent years, with apartment prices increasing by 50% and rents by 30% over the past decade. In comparison, Czech salaries have only seen a nominal increase of 21%, failing to keep pace with the soaring housing costs.

Analysts predict that the situation is only set to worsen, as declining mortgage rates are expected to drive up property prices by an additional 5% in the coming year. Factors such as high demand for properties in major cities and the ongoing energy crisis have also contributed to the housing affordability crisis in Prague.

To address this issue, Czech housing associations have proposed several solutions. One key recommendation is to prioritize the expansion of public housing in Prague, which currently accounts for only 5% of the housing stock. Additionally, implementing progressive taxation on large property owners could help curb speculation-driven price hikes and make housing more accessible to residents.

The housing affordability crisis in Prague is a pressing issue that requires immediate attention from policymakers and stakeholders. Without intervention, the city risks becoming increasingly unaffordable for its residents, further exacerbating the housing crisis.