It now takes the equivalent of 16 years’ average salary to buy a new 70-meter flat in Prague, according to data published by property developers of Central Group.
That is six years more than in 2014, evidence that salaries are not rising along with housing costs in the Czech capital.
According to Central Group, in Bratislava, it takes 12.5 years’ salary to buy a comparable flat, in Munich, 12.3 years’, in Berlin, 8.7 years, and in Vienna, 8.3 years.
Apartment prices have risen by 90 percent in the last five years, but wages have risen by only 33 percent. Therefore, they consider the availability of housing to be the worst in the entire period of monitoring the CG-Index.
According to Head and Founder of Central Group Dušan Kunovský, the way out of the crisis is to support new construction and achieve a sufficient supply of new apartments while maintaining market conditions with competition from development companies and mortgage banks.
“Since 2015, the prices of new flats in Prague have more than doubled, and the growth rate is also accelerating again. In the last year, a sharp rise in the price of construction work and materials has also contributed to this, but the main culprit for the rise in housing prices is long-term insufficient construction due to slow permitting processes,” adds Kunovský.
In the last ten years, the highest number of flats have been built in Prague 9, where the average selling price is 115,285 CZK per square meter (8.8 percent less than the average in the city).