In recent years, buying a home of your own has increasingly become a matter for the “wealthy” only. It's worth recalling that, according to the Czech Statistical Office, the average gross wage in the third quarter of this year was 45,412 Kč. That means that not even a household with two applicants earning the average wage stands a chance of obtaining a mortgage, because they only reach the 90 thousand crown threshold in gross, not net income. And it is precisely the latter that is decisive for the bank's assessment. The average income of applicants can be expected to jump by another few thousand next year.
Thinking about buying a flat to live in or to rent out? Then it's good to know that the average mortgage payment in 2024 exceeded 20 thousand Kč per month
What's more, roughly two thirds of all employees have long fallen short of the average wage. In practice, then, a mortgage is currently affordable for only about 10–20 % of the wealthiest, something the CNB leadership itself admits. As recently as before the start of the covid-19 pandemic, households needed a net income of 54,400 Kč per month.
Mortgage Rates in 2025: Room for Optimism?
Another big topic is the price of mortgage loans itself, i.e. the rate at which authorised institutions offer them in the Czech Republic. According to the latest analysis by the Hypoindex portal, we are currently in a phase of Christmas discounting. In all, 7 out of 9 banks offering mortgage loans cut their interest rates during December. Experts concede that cautious optimism is in order for next year. With the popular three-year fixation, all banks are currently offering an interest rate below the magic 5 % threshold. With one-year and five-year fixations, on the other hand, the advertised interest rates are higher. How is that possible? Banking analysts expect next year to unfold in a similar spirit to this one, but they anticipate a gradual cheapening of loans and a reduction of the base interest rate by the CNB going forward. A five-year horizon is, however, uncertain in the current turbulent times.
Forget Cryptocurrencies, Flats Are the Thing
The total volume of mortgage loans provided is similar to the pre-pandemic period. But their average size is far higher, because flats and family houses have become significantly more expensive. Simple arithmetic thus leads us to the conclusion that the number of successful applicants is ever lower.
Did you find Bitcoin or another cryptocurrency under the tree? It may be a fashionable investment with great potential, but the popularity of real estate is still incomparably higher
At the same time, every drop in interest rates, even by a few tenths of a percent, goes hand in hand with a rise in property prices themselves. So if you are still waiting and doing the maths, be careful not to miss the right moment to buy a property. Whether for your own housing or as an investment and a way to put your spare funds to good use in uncertain times. According to a survey called the Savings Barometer, 80 % of people consider owning a house or flat to be the single most attractive investment. Are you considering buying a flat to rent out, or do you already have one in your portfolio? And would you like us to find a decent tenant who always pays on time for you? Call us on +420 277 000 330 or send a message to sales@flatservice.cz. We'll be happy to explain everything professional property management involves.
