Kulhánek: Lack of Housing Policy and EU Rules Deepened Czech Housing Crisis
Minister for Regional Development Petr Kulhánek (STAN) said today that the affordability of housing in the Czech Republic has been made worse by two decades of inaction and by restrictions linked to the country’s 2004 accession to the European Union. Speaking at the For Arch trade fair in Prague, he noted that EU rules at the time prevented the use of public funds for housing construction, a limitation that has only recently been lifted.
According to Kulhánek, the turnaround began last year when the Ministry of Regional Development introduced a programme to support the construction of municipal and affordable rental housing. The scheme, originally launched under former minister Ivan Bartoš (Pirates), provides municipalities, organisations and private investors with preferential loans and subsidies. For 2025, CZK 7 billion has been earmarked from the state budget for this purpose.
He added that the European Commission has also approved the use of EU funds for housing construction in the Czech Republic, provided that projects demonstrate they do not distort market competition and that the social benefits outweigh potential risks. This notification process, completed earlier this year, has opened the way for state-supported residential construction after a 20-year gap.
“The trend of housing affordability is turning. A lot has been done in the last year and a half. There are significantly more tools to increase availability. If continuity is maintained and if future governments continue with this set of interconnected measures, we will see significant improvement within a decade,” Kulhánek told the conference.
Industry voices at the event pointed to persistent bottlenecks in planning and permitting. Petr Palička, director of EP Real Estate, said long zoning changes and the complexity of building permit procedures remain key obstacles. “The construction itself turns out to be the simplest of the whole process, but the zoning planning and the building permit process is very complicated,” Palička said. He added that the number of parties allowed to comment on projects significantly extends the approval process.
Kulhánek cautioned that it is unrealistic to expect apartment prices to fall, but argued that increased supply could slow price growth. He also underlined the need to develop rental housing alongside owner-occupied units.
Market data suggests that demand is being driven both by investors and by individual buyers. Palička noted that around half of newly completed apartments are purchased by investors, often without mortgages, while the rest are bought by households either for their own use, for their children, or as rental investments. Unlike in some markets, he said, speculative purchases of empty flats held solely for price appreciation are not widespread in the Czech Republic.
Source: CTK
