Rental housing remains significantly more economically advantageous than owner-occupied housing, as a comparative analysis by the Rental Housing Association shows. The average monthly mortgage payment on the average home is currently 1.5 times higher than the average monthly rent. The trend is towards rental housing being less and less burdensome on household budgets, which is also reflected in the long term. Currently, the difference between the mortgage payment and the average rent according to the ANB methodology is CZK 7,768.
The significant opening of the scissors between rental and ownership housing began in September 2021 and reached its peak in September 2022, when the difference between the mortgage payment for an average apartment and the average rent was over CZK 10,000. Today, the difference is smaller but still significant.
The Rental Housing Association estimates that as a result of this trend, around 25% of people in the Czech Republic will be renting in 2030. The number of so-called institutional landlords, who operate hundreds or thousands of apartments, is also increasing rapidly. In Prague, for example, there are currently 2,326 rental flats in institutionally managed new buildings, but estimates suggest that by 2030 there could be around 10,000 such flats.
It is not possible to judge the merits of rental versus ownership housing purely mathematically. Each form has its pros and cons. The argument against rental housing is that tenants are not investing in their own property, but in someone else's. However, the greater flexibility of rental housing, the lack of the need for a large financial input and the modern, well-furnished apartments from large landlords make rental housing an attractive option.
There is also a growing sector of rent-related services such as cleaning, care services, fitness centers, cafes and more, which are often included in the rental price. The quality of these services is becoming a key success factor for landlords. Overall, rental housing is becoming a modern, flexible and attractive alternative to owner-occupation.
Source: https://www.asociacenajemnihobydleni.cz
Source of apartment prices and rents - Real index and Rent index from Deloitte Advisory Ltd, source of average apartment size of 52.6 sqm - MMR statistics 2019, average mortgage interest rate with 80% from www.hypoindex.cz.
