Where to find solutions to the crisis in the housing market?

Lack of apartments and astronomical prices
The situation in the housing market in large cities of the Czech Republic, primarily in Prague, has been unfavorable for a longer period. We are witnessing a significant mismatch between demand and supply in the market. According to statistics, Prague is missing an average of 5,000 apartments annually, and this state has been ongoing for quite some time. It could be said that what drives apartment prices up is, among other things, their scarcity. Of course, we all perceive this unfavorable situation very strongly because it is a topic everywhere around us. But when you are directly part of this process and see that allowing any construction takes an incredibly long time and is very complicated, you cannot be surprised that we are in the situation we are in. We haven't planted much in the previous years, so we now have nothing to harvest.

Unfortunately, I do not have a simple and instant guide on how to get out of this crisis, and I don’t think one exists. In my opinion, the deficit needs to be caught up with construction in various forms. Not everything has to be in the hands of private developers or individuals, but the city could and should also get involved. I also welcome initiatives like baugruppe*, which function very well in Austria or Switzerland, and are gradually starting to appear in our country as well.

It’s about preferences
I believe that we have a deeply rooted need to own things, and generally, home ownership has a tradition in the Czech Republic. However, there is a lack of apartments, so it is not possible to satisfy everyone’s demand. I think it’s about preferences. Either I will own something, but it won’t be an apartment in the city center, or I will go the route of rental housing, which is an entirely common matter, and my priority will be that I don’t live on the outskirts. It’s a trade-off. After all, like many other things in life. Everyone has their priorities set differently and in different places, and the same applies to options. There is no general recipe or solution in this case.

Buy now or wait?
In my opinion, it’s necessary to clarify priorities first. Reflect on your life, not just how I function in it today, but also how I will want to live in ten years. And then decide whether I need to live in my own apartment right now and unravel everything from that. Whether to buy an apartment now or in two months does not matter, but whether to buy it now or in five years will play some role. Panicking now, thinking that prices will only go up and impulsively committing to purchase something that doesn’t have that absolute priority for me in the long term is, in my opinion, not a reasonable solution.

Trends in residential architecture
It could be said that we are observing a trend of smaller apartments, but it is not a universally applicable rule. The sizes of apartments are an interesting topic for discussion from my perspective. I have many friends scattered around the world in large cities, and when I visit them, what they live in is still significantly smaller than what we currently propose. The question is where the optimum lies and whether this decrease is more about getting closer to something more common. I believe that when a space is well and intelligently solved, the extra meters are beautiful and generous, but when you need to live, you care more about the utility of each meter than that the apartment is 5 meters bigger.

Rental housing
Due to the increasing inaccessibility of owning a home and the uncertainties associated with rising energy prices, services, and goods, rental housing is gaining attractiveness. Real estate companies are responding to this, and more and more investors are leaning towards the idea of rental housing. However, these are not projects focused solely on housing. Increasingly, residential complexes intended for rental housing include reception areas, package rooms, fitness centers, coworking spaces, shared terraces, or yards with grilling spots. Modern technologies are also making their way in, such as charging stations for electric cars in garages.

What development can be expected?
I must say that I am skeptical. I believe that the supply will be lower than demand for a long time because changes in the approval process are still more of a promise than a real action. At the same time, I think that changes in our collective approach are necessary, and we need to start supporting new projects instead of as a society hindering and harming them. We will have to be willing to change our view of the world, densify cities, and learn to accept the idea of densification while preserving the landscape outside the cities, and embrace the art of living in smaller apartments while maintaining quality of life in public spaces. It will not be easy, and I believe it is more of a task for the next generation.

Personally, I do not expect any significant decrease in apartment prices in our metropolis. On the contrary, I think we must prepare for the fact that the accessibility of owning a home will become worse and the share of rental housing will grow. On the other hand, as I know other European metropolises, it is a common reality that a small apartment in the center costs the same as a house on the outskirts, and it is a trend that no one questions. It is the reality of all economically strong large cities. Perhaps there will be some minor price correction, but no more than about 5%.

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* Baugruppe is a group of people who combine their finances and efforts to build an affordable apartment building according to their ideas. To coordinate and avoid deadlocks, they set clear rules for the entire process. They entrust the management of the agenda to a project manager. They find a plot of land and collectively finance its purchase and the construction of the building. An architect transforms their individual wishes into a building design, and after the construction is completed, each person becomes the owner of their apartment. (Source: BAUGRUPPE! Manual)