Czech Home Prices are Third Fastest-Growing In Europe

Outrage is growing at the unaffordability of the Czech housing market. New data showing that average prices are among the fastest growing in Europe suggests the Czech Republic’s status as one of the continent’s most unaffordable countries is only likely to get worse. Official data from the European statistical office Eurostat shows that house prices in the Czech Republic are the third fastest-growing in Europe, behind only Estonia and Denmark. After a recent Deloitte study, which found housing in the Czech Republic to be second-most unaffordable in Europe, this massive recent price growth shows things are only getting worse. House prices in the Czech Republic had grown by an astonishing 14.5 percent year-on-year in Q2 2021. It is thought the price spike has been driven by limited supply failing to meet high demand driven, in part, by extremely low interest rates for mortgage loans. Chief analyst at ?SOB Petr Dufek noted last month that even if housing prices on the Czech market stayed the same for the rest of the year, they would still be 8.4 percent higher than a year ago. But the new Eurostat data implies that, far from stagnating, prices are in fact spiraling even further away from affordability for most living in the Czech Republic. As well as record demand, other factors driving up the cost of houses are believed to be slow construction hampered by unwieldy approval processes, and the rising cost of building work due to price increases for raw materials and higher wages for workers. Czech housing prices are converging with those in richer European countries, but with wages failing to keep up with the increase, the basic human aspiration of owning a home is, for many, becoming more like an impossible dream. With the latest data showing that the situation is becoming worse, not better, it’s clear that something needs to change.