To purchase an average-sized apartment in the Czech Republic, five annual household incomes are needed

Prague – To purchase an average-sized apartment of 60 square meters in the Czech Republic, an average household needs five annual incomes. However, the affordability of housing varies by location; for example, in Prague, a household can buy an average apartment for eight annual earnings, while in Brno, it is seven. This is based on data from the Ministry of Regional Development (MMR) from the first quarter of this year. On average, in the first quarter, tenants spent a quarter of their incomes on housing. About 13 percent of households are excessively burdened by housing costs, meaning they spend more than 40 percent of their income on it. This is 2.6 percentage points more than a year ago and 1.8 percentage points less than a decade ago.

According to data from Deloitte, in the first quarter of this year, the price per square meter in an apartment was approximately 99,300 CZK. Therefore, a 60 square meter apartment would cost nearly six million crowns, according to their calculations. In the first quarter, the average gross monthly wage was 43,941 crowns, according to data from the Czech Statistical Office (CZSO). With these calculations, buying an apartment would require 11.4 annual salaries, which is more than six higher than indicated by the ministry's data. While Deloitte calculates affordability based on individual wages, MMR considers the incomes of entire households, including children and retirees. This figure includes not only wages and salaries but also pensions, benefits, incomes from business, or cross-border work. According to MMR, the average net income of a Czech household is 522,278 CZK per year.

MMR has started collecting data using a newly created "dashboard" on housing. According to Deputy Prime Minister and Minister for Regional Development Ivan Bartoš (Pirates), this should help analyze issues in the housing sector. MMR collects data from the Czech Statistical Office (CZSO), internally commissioned surveys, and personal communication with municipalities. In 2023, the construction of 35,704 apartments started. A total of 38,067 apartments were completed, with an average size of 49.2 square meters.

The ministry is currently addressing cuts in the budget proposal for the affordable housing program. Bartoš previously stated that he would negotiate in the government to increase investments in the construction of municipal rental apartments by seven billion crowns. According to the first draft of the state budget, MMR's expenditures are expected to amount to 13.3 billion crowns in 2025. Compared to this year, that would mean a decline of nearly 13 percent, or two billion crowns, which would be the largest drop among all ministries. Bartoš reiterated today that he does not expect the government to deny funds for the construction of municipal rental housing.

"Housing is one of my top priorities. One of the goals is to kickstart investments in affordable housing. And I dare say that after about two years of not entirely easy work and negotiations, we are looking at the finish line with colleagues. Some data is available to the state for the very first time," said Bartoš.

Support for affordable housing from the State Fund for the Support of Investments (SFPI) is intended for the construction of rental apartments and can be used for new constructions, building modifications, or extensions. Part of the funds can be immediately used for a maximum of 40 percent of costs upon meeting specific requirements. Subsequent subsidized loans, reduced by up to three percentage points from the EU basic rate for the Czech Republic, can cover up to 65 percent of the project cost. Overall, subsidies and favorable loans could cover up to 90 percent of the investment. The repayment period is up to 30 years, and early repayment is free of charge. Applications may be submitted by territorial self-governing units, state-funded organizations, or churches.

According to newly collected data, the program supported the construction of 4,688 apartments, of which 1,237 have been completed. The funds allocated for subsidies and preferential loans for the construction of municipal rental housing currently amount to 2.44 billion crowns. The total construction costs amounted to 13 billion crowns.