ASK AN EXPERT: Trends and predictions for the Prague rental market in 2024

The Prague rental housing market has witnessed a significant uptrend in recent years, primarily due to the inaccessibility of owning personal property. As 2024 unfolds, experts anticipate a continued rise in demand for rental accommodations, even with potential decreases in mortgage rates. This persistent trend is fueled by the ongoing imbalance between the housing demand and supply. Despite lower mortgage interest rates, the soaring prices of property ownership remain unaffordable for many, making renting a viable alternative.

We asked Mikuláš Hrubý, head of residential rentals at Engel & Völkers Prague, for his take on the trends and challenges the capital’s housing market is expected to face this year as interest in both central and developing neighborhoods continues to increase.    

The year 2024 is not expected to bring diverse price dynamics among different apartment layouts. Barring any unforeseen global market upheavals, such as unexpected crises or developments in ongoing conflicts, the growth in rental prices is projected to remain steady. Even the completion of planned housing projects is unlikely to significantly alter this trajectory. Demographic data and social mix analyses do not foresee higher growth dynamics among various apartment types.

There's an undeniable interest in owning property, but the feasibility of this aspiration is increasingly challenging, particularly in Prague. The attainability of personal housing in the city remains problematic. Consequently, the demand for rentals is naturally on the rise – a trend that is expected to persist. The insufficient construction of new apartments is creating pressure, driving up both property prices and rental costs.

Last year, the average price per square meter, based on realized transactions by Engel & Völkers, was 364 CZK. This was influenced by a decreased demand from expats, as well as corporate budgeting and fewer relocations. This year, however, the situation might see a slight improvement. Over the long term, a stable yet gradual increase in rental prices is anticipated.

Rental costs in Prague vary depending on the neighborhood. Central locations, such as Vinohrady, Nové Město, Bubeneč, Karlín, and Smíchov, maintain their popularity. However, areas outside the city center are gaining traction, especially those with new development projects that offer energy-efficient living, lower operational costs, parking facilities, outdoor spaces (balconies, terraces, gardens), and surrounding greenery. Notable examples include parts of Prague 5 – Košíře/Jinonice, Libeň, Vysočany – and other previously less popular locales.

Don't hesitate to contact Engel & Völkers at Pragueandel@engelvoelkers.com. We will be happy to advise you and help you choose the ideal apartment for you, which will meet your requirements and will be in line with your particular living situation.