The rental housing market in Prague is growing. There are currently 18 projects with 2,750 apartments in operation

There are currently 18 projects in Prague with almost 2,750 apartments for long-term rent. In the next three years, according to BTR Consulting statistics, approximately 2,500 flats should be put into operation in long-term rental housing projects. Meanwhile, rental prices in BTR projects fell slightly in the first half of this year. Rents in institutional rental buildings in Prague are now at CZK 525 per ^sqm/month.

Prague’s residential market is changing. The private rental sector has moved forward and the owner-occupied sector is experiencing a slight recovery as people have got used to higher interest rates and started buying apartments again this half-year. However, their affordability, or the affordability of home ownership, in Prague is the second worst among European capitals, after Amsterdam. It corresponds to the equivalent of 13.5 average annual gross wages.

But the segment of institutional rental housing is still growing. “It has an important place in the residential sector, which is justified by factors such as the constant shortage of housing, constantly rising housing prices, the influx of foreigners and so on. However, changes such as the adjustment of Prague’s building regulations for rental housing, the adjustment of VAT on construction work for rental housing, and clearly the speeding up of construction procedures are inevitable for a long-term positive sustainable situation,” emphasizes Zuzana Chudoba, CEO and founder of BTR Consulting.

The overall vacancy rate decreased to 15 percent in the first half of 2024. It is mainly driven by new projects launched this year with a vacancy rate of 30 per cent. Other projects launched by 2023 have a vacancy rate of 10 per cent, with projects launched by 2022 having only one per cent.

The rent in Prague decreased slightly in the first half of 2024 and averaged CZK 525 per ^sqm/month, while in the second half of 2023 it was CZK 542 per ^sqm/month. ” In the long term, I think rental prices will continue to rise. We expect growth of around seven percent in the BTR sector this year.” says Zuzana Chudoba, Executive Director of BTR Consulting. The difference between the rent levels for apartments owned by individual owners in mid-2024 was 29 percent. The most represented layout in BTR projects is the most desirable one in rental housing, 1-bedroom with a 40 percent share. The 1+kk, 1(2)+kk and 2+kk units then together account for almost four-fifths of rental apartments.

A new sector that is starting in Prague and which we are also following is coliving. There are two projects in Prague that will be launched in 2023 and 2024 with a total of 325 units. The rents in these projects are up to CZK 1,000 per ^sqm/month including utilities and VAT.

Student housing has a longer history in Prague, where we count existing beds and units in the thousands. According to our methodology, there are seven projects in Prague with approximately 1,400 units or 1,718 beds. Once that many beds are in the pipeline. There are another 700+ beds in 11 small projects with less than 50 units. Rents in most of the projects exceed CZK 1,000 per ^sqm/month including utilities and VAT.