Impact of Covid-19 on the real estate market is a hot topic that moves the market across the world. What is the situation of rental housing in Prague? Today, Ondřej Hlaváč, teamleader of the Engel & Völkers Residential Rental team, answers five questions on current situation.
There is no decline in interest, but the market has changed. It also depends on whether we are talking about a lower or higher standard. People have always been interested in living in the Prague metropolis. The purchase price of real estate is still growing and this forces some people, especially Czech clients, to rent instead of buy their own housing. Additionally lower rental prices help that too. In the lower segment, apartments up to CZK 20 000, some people could afford "only" housing on the outskirts of the city and suddenly they can move closer to the center for the same price. During the first lockdown in March 2020, there was an outflow of foreigners, including the vast majority of people interested in the luxury segment. Many companies have realized, that their international employees are able to do the same work from home as well as they used to do from their office, that’s why less foreigners relocate to Prague nowadays.
There is a much wider offer on the market, so details have become essential for selection today. Sometimes one missing appliance in the kitchen becomes a deciding factor. Apartments, which have their quirks are harder to rent today, for example the apartment in the basements are the most demanding to rent. We noticed an increase in interest in apartments with outdoor space such as a front garden, balcony or conservatory as well as an increase in interest in renting houses. Some clients exchanged their 250 m2 penthouse in Vinohrady for a family house with a garden in Prague 6, I have noticed many similar cases like this. The average size of rented space also increased, on the one hand due to lower rental prices and on the other hand due to the need for an extra room because of home office or children’s online education.
I don’t have experiences like that. Those who prefer to live in the city center, they can enjoy quiet living without the noise of tourism, bars, transport today and as an extra feature at a more affordable rental price than before the pandemic. Families are still looking for living in the inner city because of parks, dog walking areas or car park possibilities. From my point of view, only the structure of tenants has changed, students can live nearby their school and people who used to live in housing estates on the outskirts of Prague can live for the same price in a brick house in the center now.
These apartments gradually flooded the market with long-term rentals. Building modifications were often needed, typically the kitchen did not meet the needs for long-term living. The operators of short-term accommodation tried to keep them and pay the rent to the owner for various periods of time. Sooner or later most of them had to end the rental prematurely. Some operators, who owned the apartments themselves, decided to sell their apartment. There is also a small group of owners who have not gone along with a lower income, so their apartments stay empty. It's not just about apartments, sometimes this fate befell whole apartment buildings, not to mention hotels.
Yes, we rented 70 % of the medium and luxury segment to foreign clients in 2019, it has decreased to 55-60% now. Not counting decline of tourists, home office lifestyle, the suspension of recruitment in some companies and thus the reduced relocation of people to Prague bear it’s share.
Opening hours
Monday - Friday
8:30 AM - 5:30 PM
