The availability of apartments for mortgage loans in Czechia has deteriorated by approximately 125% since March 2020. This alarming increase is reflected in the apartment availability index, which uses data from the analytical company EMA data. The aim of this index is to monitor the development of apartment availability not only at the national level, but also in individual regions. The index combines average real estate prices in the regions and mortgage interest rates.

The index calculation takes into account an 80% mortgage repayment for a 65 m² apartment, which is the average size of an apartment in Czechia according to the Czech Statistical Office. The index is based on the average price per m² of privately owned apartments and the average interest rate on 30-year mortgages. The resulting calculation is compared to the initial value from the beginning of March 2020, when the index was set at 1. The higher the value, the less affordable apartments are; if the value is below 1, their affordability increases.

Prague currently has an index value of 1.758, which means that apartment affordability has deteriorated by approximately 75% since March 2020. The Hradec Králové region now leads with an index of 2.670, while the Ústí region, which previously had the worst availability, has an index of 2.502. Apart from Prague and the Karlovy Vary region, no other region has fallen below the 2 mark. In other regions, the unavailability of apartments is currently more than 100% higher than in March 2020.

According to David Eim, Vice-Chairman of the Board of Directors of Gepard Finance, interest in mortgage loans reflects demand for real estate investments, whether for own housing or as an investment product. "The average mortgage loan amount has exceeded CZK 4 million for the first time in history. A year ago, the average mortgage was around CZK 3.4 million, which represents an increase of CZK 600,000 in a single year," adds Eim.

After a brief decline, real estate prices are rising again. Petr Zámečník (Chief Content Officer, EMA data) points out that the stabilization of mortgage rates has not led to an upward shift in the apartment affordability index, which has remained virtually unchanged at 2.229. Real estate prices are expected to continue to rise in the coming months as mortgage rates stabilize and household incomes begin to grow again.

Looking at average mortgage payments, Prague residents pay the most: CZK 35,963 per month. This is followed by the South Moravian Region with an average payment of CZK 23,604 and the Central Bohemian Region, where apartment owners spend over CZK 21,000 per month. In contrast, the average mortgage payment is lowest in the Ústí nad Labem Region: CZK 9,881.

The nationwide average monthly payment increased slightly from CZK 19,437 to CZK 19,697. This development indicates that despite stagnation or slight growth in mortgage rates, real estate prices are likely to continue to rise.

Conclusion

In conclusion, the situation on the real estate market in Czechia remains very dynamic, and the availability of apartments is becoming an increasing challenge for many people. It is important to monitor market developments and adapt to current conditions, whether as buyers or investors.