Despite the COVID: Real estate prices in the Czech Republic rose by approximately 8% in the first half of 2020.
Real estate prices in the Czech Republic rose by nearly 8% compared to 5% in the European Union in the first half of 2020. While property prices increased in the second quarter of 2020 in most EU countries, new data from the Czech Statistical Office shows that prices in the Czech Republic rose by 7.7%, whereas property prices in the EU rose by only 5.2%, and in the Eurozone the increase was less than 5%.
Compared to the first four months of 2020, the months of April, May, and June 2020 showed a clear impact of the coronavirus on the real estate sector in the Czech Republic — for example, in rental prices in Prague. From a long-term perspective, rental prices in Prague rose by 7.4% this year compared to the previous year. However, later in 2020, rents declined mainly due to the absence of tourists and students, which led to a drop in demand for short-term rentals, especially in the city center.
The average rental price in Prague fell by 2.6% in the first half of 2020. Currently, rent stands at around CZK 300 per square meter, according to an analysis prepared for the City of Prague by consulting firm Deloitte. Between 2014 and 2018, rental price increases did not exceed 3%, while in 2017 the increase exceeded 12.5%. The current decline in rental prices highlights the reduced demand for short-term rentals in central Prague.
The impact of the decline in tourism and short-term rentals on rental prices throughout Prague is clearly visible, but the effect is most significant in the city center. According to the analysis, a comparison of rental price growth in modern housing projects versus older buildings showed a similar upward trend, despite differences in price levels.
However, a more detailed survey reveals that rental prices in new housing projects increased in 2017 and 2018 — a trend that had previously appeared in older apartments. In other words, the increase in rent was reflected throughout Prague. The analysis also confirmed that rental prices are significantly affected by the availability of metro stations and proximity to city parks.
