Buying an flat last year in the Czech Republic cost 13.3 of the annual salary, the most in Europe

by   CIJ News iDesk III
2022-08-09   15:45

Buying your own apartment with an area of ​​70 square meters cost a citizen of the Czech Republic 13.3 of the average gross annual salary last year. After an increase of 1.1 in the average salary from 2020, the Czechia ranks as the country with the least affordable own housing in Europe. The next to last is Slovakia, where citizens spend 12.8 of the average gross annual salary on the purchase of such an apartment, according to the results of the Deloitte Property Index 2022 study.

"In a comparison of selected European capitals, the situation is worse than Prague, where obtaining own housing costs 15.3 of the average gross annual salary, only Amsterdam. The Dutch pay 17.7 of the average salary for apartments in their capital city. The least such salaries, 6, 8, it costs to live in Oslo," said Miroslav Linhart, a leading partner in financial consulting at Deloitte.

The average transaction price of new apartments increased in 18 of the 21 analyzed countries. The most intense increase was recorded by Hungary, by 24 percent. VČR's increase was 14.4 percent, i.e. the fourth highest. The decline was in Latvia (minus 1.3 percent), Slovenia (minus 3.8 percent) and Spain (minus 8.5 percent). The average transaction price of new apartments in the Czech Republic last year was EUR 3,342 (CZK 81,929) per m2. The highest is in Great Britain, 4905 euros/m2, the lowest in Bosnia and Herzegovina, 974 euros/m2.

The most expensive city is again Paris, where the transaction price of new apartments is around 13,500 euros/m2 (CZK 330,952). High average transaction prices are also in Munich, London, Oslo, Frankfurt and Amsterdam. The lowest average transaction prices are offered by Varna (885 euros/m2) and Burgas (900 euros/m2) in Bulgaria. The largest year-on-year price increase was recorded in Košice, by 38.2 percent. Not far behind was Brno, with 22.4 percent, and Prague, where the average transaction price for a new apartment rose by 20.1 percent, pointed out Petr Hána, an expert on the real estate market at Deloitte.

When comparing the cities against their national average, Lisbon has the biggest difference in the average transaction price of a new apartment, by more than 300 percent. Of all the European cities represented in the study, Ostrava offers the lowest prices compared to its national average, where a new apartment can be purchased for 58 percent of the average price for the entire republic. Looking at the capital cities in the Central and Eastern Europe region, it can be seen that the price levels of transaction prices are 20 to 40 percent higher than the national average.

After a slowdown caused by the economic downturn caused by the pandemic, the European real estate market has picked up steam and property prices have risen rapidly in most countries. "The key feature of the Czech real estate market was the weak supply of real estate. For the coming year, it is expected that real estate prices in the Czech Republic, as in most analyzed European countries, will rise, albeit at a slightly slower pace," estimated Jakub Leško from the Deloitte real estate team.

High real estate prices are increasing rental housing. The most expensive rent is in Paris, at an average of 29.1 euros/m2 (CZK 713.4) per month. Tenants in Oslo, London, Amsterdam, Trondheim, Barcelona, ​​Copenhagen, Ljubljana and Bergen will also pay more than 20 euros/m2. In Central Europe, the most expensive average rent is in Warsaw (17.9 euros/m2). Bratislava follows, where the price of 11.6 euros/m2 exceeds Prague's 11.3 euros/m2 (CZK 277). The monthly rent in Brno starts at 10.1 euros/m2 (247.6 CZK) and in Ostrava at 6.8 euros/m2 (166.7 CZK). Of the cities represented, only Brasov in Romania, Celje in Slovenia and Sofia, Varna and Burgas in Bulgaria offer lower rents.

During the past year, 34,200 apartments were completed in the Czech Republic. Converted to 3.25 flats per 1,000 inhabitants. The largest ratio between completed apartments and the number of inhabitants was in France, namely 6.95 apartments per 1000 inhabitants. At 471,000 built apartments, it also means that France built the most of all the analyzed countries. Bosnia and Herzegovina built the fewest new apartments, both in total and per capita. There were 2,600 of them, which is 0.8 apartments per 1,000 inhabitants.

The study included mortgages and their average interest rates. Similar to the previous editions of the Property Index, the most indebted households in the countries of Western and Northern Europe, the Netherlands, Norway and Denmark, were in terms of mortgages. The highest average mortgage interest rate in 2021 was in Poland (4.7 percent). The lowest interest rate, 0.8 percent, was recorded by Portugal. The average interest rate in the Czech Republic was, together with Romania, the fourth highest, at 3.0 percent.

Source: Deloitte and CTK