Rental housing in the Czech Republic is undergoing planned changes that will have a significant impact on the future of tenants and landlords. The government aims to transform the current scenario, where a quarter of Czechs live in rental properties, primarily through new proposals and reforms.
One of the main aspects involves introducing a minimum three-year term for lease agreements. Currently, short-term contracts for one or two years are often signed, leading to uncertainty for both parties. The proposed change in the civil code seeks to limit repeated issuance of short-term contracts, allowing a maximum of two contracts shorter than three years, after which a contract for at least three years or an indefinite period must be agreed upon.
Another significant change involves increasing rent in connection with property renovations. Landlords might have the option to raise rent by a certain percentage of the costs invested in improving the apartment or house, aiming to motivate better living conditions for tenants.
Additionally, the Ministry of Justice is introducing measures to expedite eviction in cases of lease agreement violations. The introduction of what is called an 'Order to Vacate' an apartment or house is meant to speed up the protection of landlords' rights.
These plans are currently under discussion with associations, groups, and representatives of both tenants and landlords. While they represent a significant step toward greater stability in rental housing, their implementation is not yet definitively determined.
It is believed that these changes could revitalize the real estate market, although the current situation in construction is influenced by uncertainties arising from increased prices of construction materials and ambiguity in mortgage financing. Experts agree that the revival of the market might come with a decline in interest rates, expected no sooner than next spring.
The demand for homeownership remains, but many are awaiting more favorable mortgage rates. The complexity of obtaining a mortgage and rising operating costs for housing have deterred potential buyers, leading them towards renting.
Moreover, new players are emerging in the market specializing in financing properties for those unable to obtain mortgages. A decline in construction costs is expected to boost market revival and reduce property prices. However, currently, property prices in the market remain high, despite the nominal value decreasing in recent years when adjusted for inflation.
Changes in the rental housing sector and the situation in the real estate market remain central topics of discussion and could significantly influence the future of housing in the Czech Republic.
Sources: seznamzpravy.cz, newstream.cz, asociacenajemnihobydleni.cz
