The price of housing – whether we are talking about the level of rent or the purchase price of a house or flat – is always first and foremost a function of supply and demand. In Czechia, fewer flats have long been built than there is demand for, which pushes price tags upwards. High demand is mainly the domain of larger cities and Prague, while smaller towns and villages are fighting with all their might against the gradual depopulation that has hit above all the countryside and the peripheries of the country.
Large flats heading for the market
Yet even the growth of housing prices in cities need not be endless. Between 1946 and 1955, an average of around 130,000 children were born in the Czech Republic each year. For comparison, in 2023 91,149 children were born here (the birth rate fell below the 100,000 mark for the first time since 2005). Final data for last year are not yet available, but statisticians expect it to be the weakest year in the country’s history – the number of live births will be around 80,000.
Age structure of the population according to the Czech Statistical Office
The strong post-war cohorts, known especially in the USA as the “baby boomers”, currently own roughly a fifth of all flats and a quarter of all houses in Czechia. In nominal terms, that is about 370,000 flats and 500,000 houses. Given average life expectancy, it can be assumed that these properties will slowly start returning to the property market in the coming years. They are often exceptionally large properties – 44% of seniors live in flats with a 3+kk or 4+kk layout. Demographics may thus represent a paradoxical and, for many, unexpected solution to the country’s family policy.
Cheaper flats, or just slower price growth?
Experts do not yet agree on whether the result will be a fall in property prices or “merely” a slowdown in the pace of price growth. Very probably both will happen at once, just in different locations. Older, unrenovated houses in villages with no larger town nearby and without the necessary infrastructure and amenities will be very hard to sell. Developers know well where the interest in housing is greatest – roughly 80% of all flats built in the Czech Republic since the revolution were constructed in Prague or in regional capitals.
Seniors often live alone in flats that are larger than they actually need
It is precisely demand for property in regional centres and the capital that may remain high, particularly if Czechia continues to be a destination country for migration not only from Ukraine, but also from other post-Soviet countries and the Balkans. Immigration may be the only way to keep basic services functioning in our country. Otherwise, given the future high number of seniors and the small cohorts of working age, those services would face inevitable collapse.
When should demographic influences make themselves fully felt in property prices in Czechia? Experts believe it will be in five years at the latest, that is in 2030.
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