High demand for Prague real estate leads to skyrocketing rents, long waitlists

Property rental prices in Prague rose by 20 to 30 percent year-on-year and reached an average of CZK 400 per square meter per month, according to the real estate companies contacted by the Czech News Agency (ČTK). Some real estate experts say that rents will go higher before coming down.

Despite the increased prices, interest in renting flats and houses has been at a high level since June and increased even more after the summer holidays. One of the reasons is that applicants who wanted their own apartment or house could not get a mortgage due to higher interest rates and tightened conditions, so they had to rent instead.

On top of this, university students joined the pool of renters in September. Another group of people have to cut corners due to rising prices, and as such are changing their housing to a cheaper one.

According to real estate portal Bezrealitky, the number of people looking for rental housing rose by 40 percent in September compared to the summer. The number of requests has roughly quadrupled since March. They are not the only real estate firm to see a rise. "Compared to last year, our demand is now double," Robert Hanzl, CEO of Next Reality, told ČTK.

Flats don’t stay available for very long. In Prague and Brno, 35 percent of advertisements at Bezrealitka are closed and withdrawn within three days, and half within eight days of publication. Other agencies have similar statistics, and state that apartments are rented quickly, with contracts signed the same week the ad is published.

The number of people interested in ads has grown significantly. Bezrealitky states that, on average in the Czech Republic there are 30 applicants for one ad, while in Prague it is higher, with 43 interested parties. "The most attractive advertisements, be it property layout, location, or price, have more than 300 interested parties within three days," Bezrealitky said, adding that the record holder is an apartment with 327 requests.

The nationwide average price per square meter is CZK 230 per month, and in Prague it reached CZK 312 per square meter, according to Bezrealitky. Next Reality reports a higher average, at CZK 400 per square meter in Prague, which is a year-on-year increase of 30 percent. In Brno, according to Bezrealitka, a square meter is CZK 265, while Next Reality reports CZK 350.

Real estate network Re/Max reports a year-on-year price increase of 20 percent in Prague and Brno. For example, a 2+1 apartment in Prague's Malešice neighborhood is now rented for around CZK 17,000. The company Realitymix.cz states that the average rent for a 60 square meter apartment in Prague is over CZK 21,000.

Due to the high demand, real estate companies expect further price increases. In Prague, a square meter could cost up to CZK 500 per month. Next Reality’s Hanzl said prices will rise until interest rates on mortgages come down. After that, interest in real estate purchases will increase at the expense of rentals.

Bezrealitka head Jan Škrabánek said the market could stabilize in three months thanks to the growing number of properties on offer, which could include houses and large apartments that are energy intensive. These would significantly increase the number of available properties on the market by tens of thousands of units.