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Housing Price Trends from 2021 to 2024
The Czech real estate market reached its peak at the end of 2021 after several years of sharp increases. Between 2018 and 2021, apartment prices in Prague surged by approximately 38%. Although the percentage increase in Prague was relatively moderate compared to other cities, it remained the most expensive city in the country: by the end of 2020, apartment prices had surpassed CZK 100,000 per square meter for the first time, and by the end of 2021, the average price reached around CZK 106,750 per square meter — roughly CZK 8 million for a 75 sqm apartment (compared to CZK 5.8 million in 2018).
2021 marked an all-time high: about 7,450 new apartments were sold in Prague, the highest number in the past 15 years. The surge in demand and prices was reflected in an annual increase of nearly 25% in housing prices across the Czech Republic in 2021, driven by low interest rates and accumulated demand from the COVID period.
2022: This trend was sharply reversed in the first half of 2022. The Czech National Bank responded to rising inflation with aggressive interest rate hikes — from 3.75% in December 2021 to around 7% by July 2022. The surge in mortgage rates severely affected buyers: the booming real estate market at the beginning of 2022 came to a sudden halt, and many investors redirected their funds into bank deposits offering 5% interest or more instead of purchasing properties. By the end of 2022, the market shifted from a “seller’s market” to a “buyer’s market” — bargaining power returned to buyers after years of continuous price growth. However, there was no significant nominal price decline in 2022.
Two main factors prevented price drops: first, an ongoing shortage of quality apartments in Prague that prevented a flood of distressed sales; second, Czech sellers were generally unwilling to lower prices and preferred to wait. As a result, prices mostly froze at high levels — the nominal annual increase across the Czech Republic in 2022 was just 6.9%, but when adjusted for inflation, this represented a real price decrease of approximately 7.6%. At the same time, transaction volume dropped sharply: estimates suggest that the number of new apartments sold in Prague fell to half the 2021 peak (only about 3,500–4,000 units in 2022).
2023: The high interest rates (around 6%–7% for most of the year) continued to restrain the market. Transaction volumes remained very low, and prices stagnated with no significant change. According to data from the Czech National Bank, even moderate real price decreases were recorded in the first half of 2023 . However, toward the end of 2023, signs of change appeared: inflation started to decline, and expectations of monetary policy easing increased. In December 2023, the Czech National Bank cut the base rate by 0.25% (the first rate cut after nearly two years of consecutive increases) and announced looser mortgage qualification requirements — specifically, the removal of the DSTI (Debt Service to Income) cap, to expand the pool of eligible mortgage borrowers starting in 2024.
This step was seen by many as a turning point in the Czech real estate market: experts estimated that once interest rates fell below ~5%, many “on-the-fence” buyers would return to the market and housing prices could resume rising rapidly. Indeed, in the final quarter of 2023, market activity picked up — around 1,850 apartments were sold in Prague in that quarter alone. In all of 2023, about 4,000 new apartments were sold in Prague (a steep drop from 2021, but relatively stable compared to 2022), and the general sentiment in the industry was that the market was ready for a recovery in 2024.
2024: In 2024, the residential real estate market in the Czech Republic — particularly in Prague — began to recover. The gradual decline in interest rates (the average interest rate on new mortgages rose from about 6.1% in September 2023 to around 6.3% in June 2024, and dropped to 4.6% by May 2025) released pent-up demand and brought many buyers back into the market. According to analyses by major Czech developers (Central Group, Skanska, Trigema), more than 7,000 new apartments were sold in Prague in 2024 — an 80% increase compared to 2023.
This is the highest annual number of apartments sold in over 15 years, excluding the peak year of 2021. Once again, demand outpaced supply, resulting in rising prices: by the end of 2024, the average asking price for new apartments in Prague reached about CZK 163,000 per square meter — a 7% increase from the end of 2023 — while actual transaction prices rose by around 10% to CZK 156,851 per square meter.
These are the highest price levels ever recorded in the Czech capital, exceeding even the early forecasts by the central bank for the year. For context, according to Deloitte, the overall average price (including both new and second-hand apartments) stood at CZK 139,900 per square meter in Prague at the end of 2024, meaning a standard 70 sqm apartment exceeded CZK 10 million. Price increases in 2024 were felt in all areas: for example, Prague 3 recorded the highest annual increase, over 21% compared to 2023. The central bank itself warned that the ongoing supply-demand imbalance could lead to further significant price increases in 2025 — with the bank estimating an additional rise of 5%–10% in housing prices during the year.
Annual Change in Housing Prices in the Czech Republic (Nominal and Real)
| Year | Change in Housing Prices (Nominal) |
|---|---|
| 2021 | +25.8% ↑ |
| 2022 | +6.9% ↑ |
| 2023 | –1.0% ↓ |
| 2024 | ~+7% ↑ (in Prague) |
Rental Demand and Changes in Rent Prices in Prague and the Czech Republic
The sharp rise in apartment prices in recent years — along with growing difficulties in purchasing a property due to high interest rates — has significantly increased rental demand in the Czech Republic. Already by the end of 2021, it was reported that more people, especially young couples and families, were turning to renting instead of buying. For example, the brokerage company Bezrealitky (one of the largest in the Czech rental market) reported that in 2020 alone 47,000 rental deals were made in Prague — the highest number ever recorded.
The Prague rental market experienced significant upheaval during the COVID pandemic: in 2020, with the departure of tourists, thousands of Airbnb apartments were shifted to the long-term rental market, creating an oversupply that led to a 25% drop in rental prices. However, the post-COVID recovery was swift.
Starting in 2022, there was a sharp rise in rental demand and rental prices: the return of tourism (and apartments reverting to the short-term market), combined with the influx of refugees from Ukraine (around 350,000 refugees arrived in the Czech Republic, many settling in Prague), created a new shortage of rental housing. According to data from the Czech Property Owners Association (ANB), rent prices across the country rose by an average of 7%–8% in 2023 alone.
By the end of 2023, average monthly rent in the capital reached about CZK 395 per sqm. This means a 50 sqm apartment in Prague cost about CZK 20,000 per month — enough to rent nearly twice the size in smaller cities. For example, in Hradec Králové, you could rent ~80 sqm for the same price. At the start of 2025, the Prague average climbed to around CZK 438 per sqm per month, reflecting continued price increases, albeit at a slower pace than before.
Regional Disparities in the Rental Market
Within Prague itself, there are significant differences in rental prices between districts. In general, more central and expensive neighborhoods tend to have higher rents, although the price gaps are slightly narrower than those of sale prices. According to Deloitte’s rent index for Q1 2025, the most expensive rental areas were Prague 2 and Prague 3 (the trendy Žižkov area and nearby Vinohrady), with average rents of around CZK 478 per sqm.
By contrast, in outer districts like Prague 9, the average rent stood at around CZK 423 per sqm (but it showed the fastest increase in the city — +6.5% in a single quarter, indicating rising demand in the suburbs). Across Czech cities, price disparities are also considerable: Prague is the most expensive (CZK 408 per sqm in Q2 2024), followed by Brno (around CZK 345), while smaller cities remain significantly cheaper (Zlín at ~CZK 277; Ústí nad Labem at ~CZK 198).
The growing demand for rental housing appears to be a long-term trend. The proportion of households renting is expected to rise steadily: according to the ANB, by 2030, around 25% of the Czech population may live in rented housing — compared to historically lower figures. The main reasons are high property prices and a structural market shift — with large institutional investors entering the rental sector.
In fact, one of the most notable trends in 2024 was the strengthening of the Build-to-Rent sector and the emergence of institutional landlords such as funds, insurance companies, and banks, buying entire developments for long-term rental purposes. This trend, supported by government initiatives, may on the one hand improve the quality of rental housing (with new apartments and professional services for tenants), but on the other hand may further reduce the supply of homes available for purchase by private individuals — thus putting additional upward pressure on prices.
Rental Yields – Prague vs. Other Cities
One of the key metrics for real estate investors is the rental yield – the ratio between annual rental income and the property’s price. In the Czech market, and especially in Prague, yields are relatively low compared to other emerging markets, due to high property prices.
During the boom years up to 2021, yields in Prague dropped to just 2%–3% annually for attractive properties. However, in 2022–2023, yields moderately increased due to stabilized or slightly falling sale prices alongside rising rents. According to an April 2024 analysis by Global Property Guide, the average gross rental yield on apartments in the Czech Republic stood at about 3.58% annually. In Prague itself, the yield reached around 4.0%, which is higher than in the past (though slightly down from ~4.3% last year).
In other cities, yields are even higher: in Ostrava, for instance, the yield reached about 5.1%, the highest in the country. On the other hand, in Brno – the second-largest city – the average yield is relatively low (only around 2.9%).
Nevertheless, many investors are willing to accept relatively low yields in exchange for security and high potential capital appreciation in the Czech capital. It is worth noting that these yields are gross, before expenses. The net yield (after deducting property tax, maintenance, vacancy periods, etc.) will be approximately one percent lower.
Following recent events, some investors even experienced an increase in gross yields. In 2022–2023, while property prices stagnated or even declined slightly in real terms, rental prices surged, improving the income-to-price ratio.
Even at the start of 2024, it was reported that a combination of slight price drops and rising rents made rental yields more attractive than before. In addition, the easing of mortgage restrictions and falling interest rates have expanded the segment of leveraged buyers, some of whom are investors targeting rental income – a factor expected to support continued growth in the rental supply.
Supply and New Construction Projects – Market Impact
Despite the renewed demand boom in 2024, housing supply in the Czech Republic remains severely limited.
Prague in particular suffers from a chronic shortage due to a slow pace of construction and building permit approvals. At the end of 2024, the stock of unsold new apartments in Prague stood at around 5,700 units – a number that has remained virtually unchanged over the past two years. While 2024 saw a higher number of apartments entering the market compared to previous years (developers took advantage of the demand recovery to launch postponed projects from 2022–2023), the amount still falls far short of the estimated annual demand.
According to data from the Czech Statistical Office, between January and November 2024, building permits were issued for 6,340 flats in apartment buildings in Prague – while annual demand is estimated at no less than 10,000 new apartments each year. Moreover, a significant portion of the permitted units are not sold on the open market but are pre-sold to institutional investors and transferred directly to the rental sector, further reducing the available supply for private buyers. Simultaneously, previously approved projects are being sold off, and new ones are not being approved quickly enough due to bureaucratic delays and challenges adapting to the new Czech planning and building law. This raises concerns that the structural supply shortage may worsen again in the coming years.
Nevertheless, it’s important to highlight several major initiatives that could increase housing supply in the coming years:
- Large-scale brownfield projects in Prague: Major developers such as Sekyra Group are building new neighborhoods on reclaimed urban land. Three strategic projects are underway:
- Smíchov City in District 5 (development of 200,000 m² on the old Smíchov railway site)
- Rohan City in District 8 (22 hectares along the Vltava River)
- Žižkov City in District 3 (300,000 m² at the former freight station site in Žižkov)
- Each of these projects is expected to deliver thousands of housing units: for example, Žižkov City is approved for ~3,000 new flats with an investment of CZK 25 billion. Smíchov City is already under construction, with hundreds of units added between 2023–2025. While their impact on the market will be gradual – over a decade or more – they are expected to substantially increase Prague’s housing supply and ease pressure in the city center.
- Government and municipal housing initiatives: The Czech government and the City of Prague have recognized the need to boost residential construction, especially affordable housing. In 2020, Prague launched the municipal company PDS (Pražská developerská společnost) to initiate projects on municipal land. Today, PDS holds over 800,000 m² of land in Prague and is promoting more than 50 projects, with a potential of 6,000–8,000 apartments over the next decade. Highlights include new districts in Dolní Počernice and Nové Dvory on the outskirts, as well as medium and small developments within the city. The city is also repurposing existing buildings (e.g., the old post office on Na Strži Street) for public housing, aiming to expand the public housing stock and stabilize the market by renting new units at moderate “social” prices. These programs aim to “cool the market” long-term by offering regulated rents to key workers (teachers, police, essential services) and ensuring geographical distribution throughout the city. In the short term, however, the municipal impact is still limited – only a few hundred units per year are expected to be delivered from 2025 onward.
- Other approved projects: In addition to the flagship initiatives, other private projects have received approval and are expected to begin soon. These include infill and mixed-use developments in places like nákladové nádraží Žižkov, urban renewal schemes, and vertical expansions in major cities. The Czech government is also discussing reforms to accelerate construction – including faster permit processes via digitization, appointing a national housing commissioner, and even mortgage guarantees or subsidies to encourage developers. As of 2024, new housing supply remains significantly below demand, and without meaningful reform, analysts expect that the shortage will continue to drive price increases.
Forecasts for 2025
After an impressive recovery in 2024, the question arises: how will the residential real estate market in the Czech Republic evolve in 2025? Overall, industry forecasts are cautiously optimistic: most analysts expect continued price increases, albeit at a slightly slower pace than in 2021 or 2024. The Czech National Bank itself projects that “price stability” in the sector would require a significant slowdown, since annual growth of 5%–10% is still considered high. However, given current market conditions, the CNB estimates this range (5%–10%+) to be the realistic scenario for 2025 due to the ongoing supply-demand gap.
The ANB homeowners association stated at the end of 2023 that apartment prices had already bottomed out during 2023 “and will not fall further,” expecting a renewed increase – estimated at up to 10% during 2024, a forecast that has partially come true and is likely to continue into 2025.
Stakeholders in the commercial real estate market (CBRE, Colliers, and others) note that real estate investment in the Czech Republic is expected to pick up in 2025, driven by economic improvement and falling interest rates. CBRE’s 2025 outlook report anticipates moderate growth in the Czech economy with declining inflation, leading to improved transaction volumes across all sectors.
Specifically in the residential sector, the report highlights the growth of the institutional rental housing market as a key trend – institutional investors are expected to continue focusing on long-term rental apartment buildings to meet growing demand for affordable housing. This means 2025 may bring major investment deals in the residential sector (e.g., funds purchasing entire apartment blocks), a relatively new phenomenon in the Czech market.
Forecasts by international real estate consultancies also point toward a return to growth: Knight Frank noted in its reports that by late 2024, luxury projects are re-entering the market after a hiatus – indicating renewed confidence in price increases in high-demand areas.
The Czech News Agency (ČTK) reported in late 2024 that real estate experts expect rising demand and moderate price increases in 2025 due to improving macroeconomic outlook and gradually declining interest rates. According to the report, second-hand apartments are expected to see only minor increases (~1% over the coming year, after strong growth in 2024), but new apartments and the luxury segment may see more significant growth due to a shortage in new construction starts.
There are also more aggressive forecasts: for example, mortgage advisors at Swiss Life predict that apartment prices, which rose by 10%–15% in 2024, could increase at a similar pace in 2025. This is based on the assumption that mortgage rates will fall to around 4.6% by the end of 2025, bringing more buyers back to the market. They even urge buyers to act now before prices surge again, arguing that while interest rates can be refinanced later, the purchase price is “locked in” forever. This approach assumes that once interest rates fall below a certain threshold, demand will spike and prices will rise rapidly. Indeed, as of June 2025, interest rates have dropped to 3.5% — the lowest level since 2021 — and there is noticeable activity from borrowers refinancing or re-entering the real estate market.
Conclusion
In summary, there is general agreement that the Czech residential real estate market will continue strengthening in 2025, though not necessarily at the dramatic pace seen during the COVID years. Key factors such as macroeconomic conditions, interest rates, and supply will play a role: a continued moderate decline in interest rates (as hinted by the CNB for 2025) is expected to further boost demand for mortgages and home purchases.
As long as new construction lags behind demand, prices will likely continue to rise – estimates range from low single-digit growth to around 10% in the coming year. Rental prices may also rise slightly, albeit at a slower pace. The share of rental households is expected to reach new highs, as more young people and families choose (or are forced) to rent long term.
Meanwhile, the real estate investment market is expected to recover – both in the residential sector (apartment blocks and rental projects) and in commercial real estate – with total property investment in the Czech Republic projected to exceed €2 billion in 2025, according to CBRE.
There are, of course, risks to these forecasts: another inflation surge, a European recession, or political delays in housing reforms – all could dampen demand. But for now, the general direction suggests that 2025 will be a year of continued market strengthening, with further price increases (albeit more moderate), a growing and active rental sector, and the entry of new players (including institutions) offering innovative housing solutions in the Czech market.
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