Czechs are increasingly buying apartments as an investment
As Radio Prague reports, today only one in five Czechs lives in a rented apartment. At the same time, the number of renters has been steadily declining for several years. If 10 years ago 27% of Czechs rented housing, today this figure is only slightly above 20%.
Martin Lux, a researcher at the Institute of Sociology of the Academy of Sciences, believes that this could lead to serious economic problems in the future. "Firstly, it makes the housing market less stable and less resilient to financial crises and the emergence of price bubbles. Moreover, owning the home in which a person lives reduces the willingness of family members to move to a new location for work, which in turn affects unemployment levels. Another consequence of this situation is the issue of mortgages, which gradually turns owner-occupied housing into one of the significant features of social inequality in society," the expert explains.
One of the reasons why Czechs are increasingly buying apartments is low interest rates on mortgage loans. Since the 2008 financial crisis, they have been constantly falling and have now reached their historical minimum. Among other things, this leads to apartments being increasingly purchased not only as a place to live but also as an investment.
"If we compare today's situation with that of four or five years ago, previously only about 10% of apartments were bought for investment. Currently, up to 30% of apartments are being purchased as investments. Particularly popular in this segment are small one-room studio apartments and two-room apartments with semi-studio layouts," said Evžen Korec, director of the large development company Ekospo, in an interview with Czech Radio a year ago. Today, this trend has only intensified.
The ratio of owner-occupied and rented housing clearly demonstrates the significant differences in this segment of the economy that still exist between Eastern and Western Europe. The highest percentage of the population living in owner-occupied housing is observed in Romania (96%). And there, the quality of housing is the lowest in Europe: 20% of Romanians live in houses or apartments lacking a flush toilet or shower, in rooms without windows or with a leaking ceiling. In the Czech Republic, such substandard housing accounts for 3.5%.
Among Europeans, the Swiss most often live in rented housing (55%), followed by Germans (48%).