Are flats in Prague really as ridiculously overpriced as they say? And is there really nowhere for their price to rise? In this episode of the Live Prague series, we look at the prices of apartments in the capital and their affordability.

Why were apartments relatively easy to sell in 2023 despite high mortgage rates and black scenarios presented in the media?

Vinohrady versus Jižní Město
All the catastrophic scenarios predicting the collapse of the real estate market in Prague due to too high apartment prices forget one important aspect - that our metropolis is not a single entity. Each Prague locality has its own buyers with different incomes. A person with a different income is looking for an apartment in Vinohrady than an apartment in Jižní Město.

Available or unavailable?
So what about the availability of apartments for those interested? Simply compare his/her normal annual income and the price of an apartment in a given location. If the price is below 8 annual incomes, the housing is affordable. If it is higher than 9 income, then affordability deteriorates.
Let's stay with the example of Vinohrady, where housing is mainly sought by people with higher incomes. A 2-bedroom apartment here costs about CZK 8 million. A person with an income of CZK 100,000 a month needs 6.5 annual salaries to buy it, a couple with similarly high incomes needs a little over 3 annual salaries. In such a case we can talk about "housing for a song".
However, a person with an average income in Prague, which is about 40 thousand CZK per month, needs almost 17 annual salaries for the apartment. In this case, affordable housing is definitely not...
If we look at a 2+kk apartment in Jižní Město, its price is around CZK 4.5 million. A buyer with an average income (40 thousand CZK/month) needs about 9.3 annual salaries - which puts this housing slightly above the affordability threshold. According to this logic, an apartment in Jižní Městě is actually more expensive for an ordinary buyer than for a buyer in Vinohrady. And so the price of Vinohrady real estate still has room to rise...

Small or big?
The location where the apartment is located also determines the types of properties that are sold there. In attractive parts of Prague, despite astronomical prices, small and large apartments, villas and land are sold. Buyers here have high enough incomes to pay almost any price.
In less attractive locations, however, smaller flats are selling well and their price is affordable even for average earners. These buyers do not have sufficient funds for larger properties.

And how do you view the prices and availability of housing in Prague? Let us know in the comments!

0:00 Apartment for a buck in Prague?
0:32 How apartments in Prague are selling
0:46 No neighbourhood like a neighbourhood
1:10 What is the affordable price of an apartment
2:52 How affordable is an apartment in a block of flats
3:35 Which properties are for sale in Prague?

Are you wondering why we chose Vinohrady as our example? It is the most popular district in Prague. Why? We'll tell you in the video:    • Vinohrady: Dřív tu rostla vinná réva,...  
Of course, this does not mean that the aforementioned South Town has nothing to offer! For example, the prefabricated houses here hold some interesting records. Which ones? Take a look:    • Panelákové rekordy: Který je nejdelší...  
Other "underestimated" Prague neighbourhoods also hold many surprises that make their inhabitants love them and make them worth visiting. Take a look at what Nusle has to offer:    • Nusle jsou utajená pražská perla, kde...  
And speaking of lesser-known districts - do you know how Řepy got its name and which famous robber it is associated with? Let us tell you:    • Pěstovala se v Řepích řepa? A který s...  
If you are more interested in the present than the past of Prague's neighbourhoods, then check out the news from Masarycka. Which businesses can you find in this architectural gem? Take a look:    • Nové podniky na Masaryčce. Tyhle musí...  

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Daniel, Lukáš, Honza, Martina, Květa, Ruda