ASK AN EXPERT: What are the current trends on the Prague rental market?

The low availability and high demand for rental spaces in Prague are impacting prices as well as people's decisions on whether to buy or rent real estate. We asked Ondřej Hlaváč, head of residential rentals at Engel & Völkers to talk in more detail about the current real estate market in the Czech capital, including future trends.

Due to the development of the political situation in Europe and the associated impact on the economy as well as population migration, the second quarter of 2022 saw a return to pre-2020 prices in the Czech real estate market, said Hlaváč. These factors also led to accelerated rental price growth, mainly due to enormous demand.

"Given that mortgage rates are currently high in the Czech Republic, we expect to see a continued general trend toward renting over owning to continue throughout the year and that rental prices will increase further," Hlaváč notes.

At the turn of 2022 and 2023, the market saw price stagnation caused primarily by the record number of newly finished apartments and the rise in energy prices.

In 2023, the average rental price for Prague was CZK 364 per square meter, with prices taking into account the location (such as the suburbs), the overall condition of the apartment (whether or not it had been recently renovated), and whether the apartment was in older or reconstructed buildings.

The rental rates on the Prague market vary significantly between apartments under CZK 20,000, those priced at CZK 40,000, and higher-end apartments. Affordable apartments under CZK 20,000 receive numerous inquiries daily and can be rented within a few days, while apartments with a net lease below CZK 40,000 also see swift rental activity.

Luxury properties may spend more time on the rental market, but this is not always due to a lack of demand. While it can take longer to find tenants for luxury properties, their uniqueness can make them appealing and lead to fast rentals as well.

According to Hlaváč, the most frequently rented apartment size in the Czech capital is 2+kk with 45-55 m2 size. Generally speaking, the most desired apartments are in premium locations and include amenities like balconies, terraces, and parking.

He notes that the most sought-after rental properties, indicated in red on the map, are villa quarters in Prague 6: Hanspaulka, Ořechovka (part of Střešovice), Ladronka Park (part of Břevnov), and Stromovka Park (part of Bubeneč) where both the villa quarter and historical apartment housing are in high demand.

Historical apartment housing in Old Town and New Town (Prague 1), and Malá Strana (Prague 1) are in equally high demand as are historical apartments with river views in the Smíchov embankment area (Prague 5) and the embankment opposite Nové Město (Prague 2). The neighborhood of Hřebenky, also in Smíchov is in high demand as well.

In addition, the area of Vinohrady, Prague 2, near Riegrovy sady and Havlíčkovy sady parks, and the area around Jiřího z Poděbrad square are among the most in-demand among renters. As indicated by the map in the dark orange color, central locations are also in high demand.

Several locations are becoming increasingly popular among renters in Prague. Those include Nusle (Prague 4) and the upper part of Smíchov (Prague 5) where there is a lot of new development. Parts of Libeň (Prague 8) where there is a lot of new development, especially close to the Vltava River, and the upper part of Žižkov where a lot of new development and whole new quarters are being built are also becoming popular.