Unbearable and Unaffordable : Housing Crisis Dramatic in Prague, Berlin, and Warsaw
Across European countries, the face of the housing crisis presents myriad challenges.
One thing is certain: addressing the crisis demands state intervention.
Prague
The term "unaffordable" has become synonymous with Prague in the context of the European housing market. According to surveys, it is the most difficult city to acquire a home in the Central European region. For the purchase of a 75 square meter property, one needs the equivalent of 25 years' worth of net average earnings, marking the highest ratio within the EU. This issue would not be as severe if there were enough rental properties available. However, in the Czech Republic, over 70 percent of the properties are privately owned. Similarly to most Central European countries, locals prefer to purchase properties for personal use rather than for leasing.
This situation places first-time homebuyers and young professionals in an increasingly difficult position, with a quarter of households spending forty percent of their income on housing expenses. The sharp increase in expenses now threatens 160,000 individuals with a housing crisis in Prague, a city with a population of 1.3 million. These are people who are unable to afford either their rent or mortgage repayments. Rental prices continue to rise, with a 50 square meter apartment now demanding between 750-800 Euros in Czech currency (approximately 300,000 Hungarian forints).