Deloitte: Prague becomes third-worst in Europe for housing affordability

Looking to buy a new apartment in the Czech capital? To purchase it outright, you’ll need to work nonstop for an average of 15 years without spending a haléř on anything else.

According to consultancy firm Deloitte’s latest Property Index, Prague is the third-least affordable major city in Europe for homeownership, requiring 15 gross average annual salaries.

The new report shows that affordability has actually worsened over the past year. Residents now need 1.7 more annual salaries than in 2024 to purchase a new apartment. Only Amsterdam, at 15.4 salaries, and Athens, at 15.3, rank worse overall.

By sharp contrast, the most affordable housing is in Turin, Italy, and Odense, Denmark, where buyers need just 4.9 annual salaries in both cities.

The affordability index measures the number of average annual gross wages needed to buy a 70-square-meter (sq m) new apartment. In Prague, the average monthly wage was CZK 62,472 in the first quarter of 2024, according to the Czech Statistical Office. 

Meanwhile, developers report that new apartments sized an average 70 sq m in the capital sold for about CZK 11.94 million in the second quarter, up a significant 8.8 percent year on year.

“The situation remains unfavorable, and fundamental changes aren’t yet on the horizon. The gap between wage growth and property prices is further deepening, as wages cannot keep up with the rising costs of residential housing,” Miroslav Linhart, managing partner of Deloitte’s financial advisory department, said.

According to Linhart, “this structural imbalance poses a long-term problem for the affordability and sustainability of the market: especially for first-time buyers and middle-income households.”

Despite rising prices, demand has held strong. Developers sold 4,300 new apartments in Prague in the first half of 2024: around 23 percent more than a year earlier and the second-best half-year result in 15 years.

On the construction front, Czechia ranked 14th out of 25 countries surveyed, with 3.34 housing projects per 1,000 residents launched in 2024. Ireland led in new construction, followed by Turkey and Israel, while Albania, Italy, and the UK recorded the lowest activity.

Renters face little relief. Deloitte found Prague among the pricier cities in Central and Eastern Europe, with average rents for a 70 sq m apartment standing at CZK 28,350.

Luxembourg posted the highest monthly rents in Europe, at EUR 3,038 (CZK 74,580), followed by Paris (EUR 2,240; CZK 55,000), and then Dublin (EUR 2,219; CZK 54,480).