For a large share of them, given current house and flat prices and mortgage rates, this will genuinely be the only way to reach home ownership. There is a catch, though: for now, the ones inheriting will mainly be their parents. The bleak housing situation that weighs above all on Generation Z, which is only now entering the labour market, may therefore be solved chiefly by solidarity between generations.
Almost a million houses and flats
How many people will inheritance affect in the coming years? The generation born up to 1955, i.e. in the first decade after the end of the Second World War, remains by far the largest age group in the Czech Republic. That is almost two million people who own more than 800,000 properties. In total, that means nearly 370,000 flats and 450,000 family houses.
At the turn of the millennium, Czechs were fleeing prefab flats en masse; today they are slowly moving back into them
It is also a generation that reached working age at a time when the previous regime was completing prefab housing estates on a massive scale. Over two thirds of all flats owned by seniors are therefore located in these “panel blocks”. Despite the fact that socialist planners never counted on such a long service life for flats built from prefabricated panels, many of them are in excellent condition. Alternatively, a renovation can give them a second life fairly easily and without excessive cost.
Mum, Dad, we'd like a place to live…
In practice, however, this means young people will have to rely above all on good relations with their parents (today's fifty-somethings) and their willingness to help their offspring in a difficult situation. A recent sociological survey found that around 40% of all Czech families live in a property they acquired through inheritance or as a gift.
In Prague, future generations will inherit on a large scale, yet this is unlikely to fundamentally change the local property market
There is one more potential problem. Many of the vacant flats will be in locations that Generation Z (and possibly Generation Alpha in the future) do not find particularly attractive. Inheritance has little potential to solve the housing crisis in large cities such as Prague, Brno or Ostrava, since inherited properties will tend to be in district towns or smaller municipalities across the country. In other words, in places that often lack enough vacant and, above all, interesting job openings for university-educated and qualified people.
No money? Don't even go to the bank!
There will undoubtedly be plenty of cases where a property acquired through inheritance heads for the secondary market, with the next generation using the proceeds either to look for housing elsewhere, or as the essential basis for obtaining a mortgage loan. Whether young people will actually want to move back to the places where their parents or grandparents lived, only time will tell. Some of the vacant flats will doubtless end up on the rental market, especially in locations with poorer amenities and long-term prospects. For many Czech small towns, however, the changing of the generations represents a unique opportunity to gain a completely fresh impulse. Do you own a property in Prague or the surrounding area and are considering offering it for rent? Consider using the services of a professional manager who will photograph the flat, prepare all the administrative paperwork and find you the ideal tenant at the highest possible market rent. If you would like to know more about our FLAT SERVICE Partner and Garant services, contact us by e-mail at sales@flatservice.cz or by phone at +420 277 000 330.
