No surprises: the real estate market in Prague is at a peak.
But did you know that the average resident in Prague is paying 11.5 times their annual salary to purchase an apartment?
That’s considerably more than cities in neighboring countries, where the average cost of an apartment may be higher, but residents are also making much more.
Last month, Central Group analyzed the cost ratio to buy an apartment in Central European cities, using the average cost of a flat (4.8 million CZK in Prague) and the average salary of a resident (34,824 CZK per month in the Czech capital) as a base.
At an average cost of 4.8 million CZK, Prague doesn’t have the most expensive flats; among the 10 cities surveyed, Munich holds that title, at an average price of a whopping 12.94 million CZK.
But residents of Munich are paying 9.1 times their average wages in order to afford that flat, compared to the 11.5 years a Prague resident will need to work to cover the cost in their city.
Here ‘s how many years an average resident will need to work in order to pay off the debt:
- Prague – 11.5 years (average flat: 4.8 million CZK)
- Vienna – 9.9 years (8.93 million CZK)
- Munich – 9.1 years (12.94 million CZK)
- Bratislava – 8.9 years (3.82 million CZK)
- Budapest – 8.8 years (3.05 million CZK)
- Warsaw – 6.4 years (2.63 million CZK)
- Berlin – 6.4 years (7.37 million CZK)
- Hamburg – 6.2 years (8.11 million CZK)
- Cologne – 5.2 years (6.72 million CZK)
The average flat size in most cities was between 67 and 72 square meters, though Warsaw was way down at 55 m2.
During the past two years, real estate prices in Prague have surged: during the second quarter of 2014, residents of the Czech capital would have only needed to pay 9.5 times their annual salary to afford the average flat.
“This situation is mainly influenced by the fact that the pace of construction in Prague is significantly slower than that in other foreign capitals,” said research firm KPMG’s Pavel Kliment in a press release.
“The number of new dwellings built in the last six months is three times less than the number of apartments sold.”