Lower rental prices in Prague due to the great absence of students and tourists

The measures related to the Covid-19 pandemic have led to a sharp drop in rental prices in Prague. This is due to a few factors, including a lack of tourism and an absence of university students.

Before the lockdown, thousands of college students were typically expected at the end of the summer to seek accommodation, but distance learning has been forced by governments around the world, eliminating the need for students to find accommodation. physically present.

A significant decrease has been documented since August 2020, noticeably culminating in a time when it was clear that universities were not going to be open again and that learning would stay online. Rent prices have fallen since then, affecting all areas of Prague.

Notably, Prague 1 saw a huge drop of 11.5% in August last year, followed by Prague 7, with a documented drop of 5.8%. The estimated rental price for 1 + KK has fallen by 12% to around CZK 11,000 since December 2020.

In contrast, the rents for 3 + KK apartments fell by 14.6%.

What this means for the market is a drop in short term rentals. Mainly correlated with the fact that there are not enough tourists to rent apartments for a short period. A lot of the smaller apartments that were mainly rented on Airbnb, for example, have moved to long-term rentals.

Petr Hlaváček, deputy mayor of Prague and responsible for territorial development, said that “not all apartments for short-term rental are suitable for standard use”.

In general, the number of apartments available for long-term rental is now greater, with a documented increase of 97.7% (14,738 compared to 7,453 in 2019), at the end of the second quarter of 2020.

This is an unprecedented number of long-term apartments available over the past four years.

House prices, on the other hand, are not expected to fall for the foreseeable future, again especially in Prague. According to analysts at Deloitte, developers would rather reduce supply than sell at a loss.

And with ever-increasing demand, along with a combination of slow building permits, rising land prices, building work, and rising material costs, the break-even point and therefore selling is also on the rise. constant increase.

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