Reading time: 2 minutes 
If you're looking to rent or buy property in Prague, the market looks bleak. Both rental and purchase prices have reached record highs, with demand continuing to grow due to population increases and limited housing supply. This raises an important question: will Prague’s housing market ever become more affordable?
The current situation
In 2024, Prague had the highest rental prices in the country, averaging CZK 412 per square meter. The most expensive district, Prague 2, saw rents rise to CZK 477 per square meter, according to the Deloitte Real Index.
Buying property is also costly. A 60-square-meter apartment in Prague now costs around CZK 8.3 million, reflecting a nearly 10 percent year-on-year increase.
It now takes nearly 15 gross annual salaries to afford an apartment in Prague, compared to less than 10 a decade ago. The competition for rentals is intense—developer PSN recently reported that 108 people in Prague vie for each available apartment today, a 50 percent increase from September 2024.
The supply shortage
The housing crisis stems from basic supply and demand. Prague's population is growing rapidly due to job opportunities, an aging population, and an influx of refugees. However, housing construction has not kept pace.
In 2024, only 7,000 permits for new housing were issued in the capital, far below the 10,000 experts say are needed annually. According to developer Central Group, Prague is short 88,000 apartments to meet current demand.
Maxima Reality has highlighted that the slow approval process for building permits further exacerbates the shortage. While some neighboring countries process permits in weeks or months, Czechia’s process can take up to a year.
Future projections
Housing prices in Prague are expected to continue rising. Data from European Housing Services and Bezrealitky predicts at least a 10 percent increase in average rents in 2025, matching 2024's growth.
Meanwhile, purchase prices for owner-occupied housing are projected to rise by 5 to 10 percent, continuing the upward trend of recent years.
“A further decrease in mortgage rates this year will drive demand even higher,” said Central Group executive director Michaela Váňová told media outlet CzechCrunch.
Experts also anticipate growth in institutional rental housing, with major developers planning new projects. However, these units will likely be priced above the market average due to their new construction.
So, will prices drop? Unlikely.
The government acknowledges that Czechia has one of the slowest building permit processes in the EU, contributing to the housing crisis. Efforts to digitize the system last summer failed, further slowing approvals.
With multinational companies continuing to attract workers to Prague, the only viable solution to easing price increases is boosting construction.
There has been some progress. Twice as many new buildings were completed in 2024 compared to the previous year, and a new Building Act introduced in July 2024 now allows municipal and regional authorities to handle permits. However, this alone is insufficient.
Even with increased construction, property prices are unlikely to drop significantly. "Building more may slow price increases, but other factors will keep pushing prices higher," Ondřej Boháč, director of the Prague Institute of Planning and Development, damningly told CzechCrunch.
