Rental housing in Prague has experienced a significant upswing in recent years. The lack of available and affordable apartments for sale has led to a boom in the construction and rental of rental units. Large investors and development companies are coming up with solutions that help meet growing demand while offering greater security and a wider range of services than individual landlords.

It is estimated that around a thousand new rental apartments will be added in Prague each year. This is the biggest change in the housing market in the last thirty years. Over the last three years, the number of rental apartments operated by investors in Prague has more than doubled, and there are currently almost five thousand, with thousands more planned in the near future.

International institutional investors are also showing interest in the Czech market, seeing its potential and growing demand for rentals. Most large local developers are incorporating rental apartments into their plans. One of the locations with growing demand is Brumlovka, where Passerinvest is developing a mixed-use project and also building rental apartments. The lack of certainty and complications associated with homeowners' associations for individual apartment ownership have prompted developers to focus more on rental housing.

Developers are also appearing on the market who specialize solely in construction and do not take over the actual operation of rental apartments. This creates space for large investors and specialized funds that have been involved in rental housing for a long time. This segment often targets more affordable rents than the regular market while offering higher quality, services, and comfort. Its attractiveness is growing mainly due to the unavailability of mortgages and high apartment prices.

In 2022, a record number of more than 39,400 apartments were completed in Czechia, making it the most successful year in the last 15 years. However, construction is expected to slow down in the coming period – the number of apartments started in January and February fell by 6.5% year-on-year. This trend is mainly linked to high apartment prices and the unavailability of mortgages, which is leading more people to look for rentals.

The response to growing demand is new development projects focused on rentals. These are either projects that were originally intended for sale but have been partially reoriented, or projects primarily intended for rent. This creates a separate segment of rental housing that differs significantly from the traditional "second-hand" market, particularly in terms of the quality of the apartments and the level of services provided.

Rental housing in Prague and throughout the Czech Republic is thus gaining increasing confidence. It offers greater security of long-term rental and services that correspond to a modern lifestyle. With growing demand and the development of new projects, further dynamic growth in this segment can be expected.

Source: ekonom.cz, Rental Housing Association, E15.cz, faei.cz