Czech government plans pension fund investments in housing by year-end

The Czech government aims to enable pension funds to invest in housing by the end of the year, with funds prepared to inject tens of billions of crowns into the market, according to Finance Minister Zbyněk Stanjura (ODS). Speaking on Czech Television’s Questions of Václav Moravec (OVM), Stanjura emphasized the need for legal changes to facilitate these investments.

However, Alena Schillerová (ANO), Shadow Finance Minister, dismissed the announcement as pre-election rhetoric, while Deputy Governor of the Czech National Bank Eva Zamrazilová pointed to bureaucratic hurdles as the primary barrier to large-scale housing development.

The Czech Republic ranks among the five worst EU countries in housing availability and affordability, slipping to 23rd place in the 2024 Prosperity and Financial Health Index compiled by Česká spořitelna and the Europe in Data portal. The high cost of housing and slow construction rates are key contributors to this decline.

To address the crisis, Stanjura stated that legal amendments will be introduced within existing legislative discussions in the Chamber of Deputies. The government also plans tax law adjustments to equalize tax benefits between cooperative housing and traditional mortgages or housing loans.

The administration hopes to launch most of its housing support measures this year, with a long-term goal of constructing “high thousands” of apartments annually. Stanjura believes that 10,000 new apartments per year is a realistic target.

Schillerová, Vice Chair of ANO, dismissed the initiative as a last-minute election promise, stating: “A promise does not cause sorrow.” She claimed that ANO is actively working on housing policies and has pre-prepared legislation that would be ready for implementation if they return to power.

Zamrazilová warned that 10,000 apartments per year would still represent only a quarter of what has been built in past years. She blamed the lengthy and bureaucratic construction approval process, arguing that delays caused by passive-aggressive officials must be addressed to ensure housing projects move forward efficiently.

Prime Minister Petr Fiala (ODS) recently announced that 92 projects have applied for financial aid for affordable rental housing, amounting to 5.1 billion crowns. This includes 3.2 billion CZK in preferential loans and 1.9 billion CZK in grants, funding nearly 1,500 rental apartments.

The State Investment Support Fund will finance new housing projects, renovations, and extensions, aiming to alleviate the country’s housing shortage. However, critics argue that without streamlining regulations and expediting approval processes, even large-scale investments may not be enough to meet the growing demand for affordable housing in the Czech Republic.

Source: CTK