How does Europe live?
According to Eurostat data, rental housing accounted for just under 22% of the Czech market in 2021, a year later it reached 23% and during 2023 it rose to 24%. A growth of 2 percentage points may not sound dramatic, but in real terms the share of people living in rented housing rose by 9% and this trend is undoubtedly continuing this year as well. It is therefore fair to say that a quarter of the local population lives in rented housing. Compared with other European countries, however, this is still a relatively low share. In neighbouring Germany, for instance, the share of rentals is consistently above one half, specifically 53% of the population in 2023. The situation in nearby Austria has long been very similar.
Interest in rental housing is growing – both in the Czech Republic and in neighbouring countries
Your own home? Often out of reach
Who might start looking for rented rather than owner-occupied housing? People expecting the arrival of a new family member, for example. After the birth of a child, young couples often start looking for a bigger, roomier property to replace their starter flat, yet securing a mortgage at current property prices is no easy task. More and more of them are therefore abandoning the idea of buying a flat and choosing to rent instead. This shift away from owner-occupied housing and the trend of moving into rented accommodation is driven not only by expensive mortgages with interest rates hovering around 5% and high purchase prices of residential properties in Czech cities, but also by demographics. Right now, the large cohorts born at the turn of the millennium are looking for a home of their own. Generation Z can be attractive tenants, for instance for owners of modern, well-equipped properties in the centre of Prague. Among middle-aged people, meanwhile, the “singles lifestyle” and single-person households are on the rise, and smaller flats suit them perfectly. We recently wrote about how investing in small flats can pay off the most, after all.
What length of lease should you choose?
The results of a survey carried out for the Ministry of Regional Development show that almost 20% of tenants have a lease shorter than one year. Another 26% have a lease of one to two years and just under 45% an open-ended one. The study also revealed a strong link between the tenant’s age and the length of the lease. Short-term rentals tend to be the domain of young people, usually with lower incomes, living in large cities. A large share of them are students sharing a flat. By contrast, open-ended leases are more common among people aged 45 and over. They give them the certainty of continuity and a roof over their heads, and mobility naturally declines with age. The preferred length of lease is interesting too: 71% of landlords prefer leases of 2 years or less. Only 23% of property owners are happy with an open-ended tenancy.
Short-term leases suit young people better, while older tenants value long-term security
Rental housing is a scramble
According to experts, the growing interest in rental housing will become a long-term trend and the share of people living in rented accommodation in the Czech Republic will keep rising year on year. Housing simply is, and will remain, a sought-after commodity. If you are interested in first-hand experience with offering a flat on the property market, we have put together a few tips in the Flat Service Advisor on how to set the right rent, along with one personal story where things did not quite work out. Do you have a vacant flat and are thinking about renting it out? Don’t hesitate to contact the professional property managers at Flat Service on +420 277 000 330 or at sales@flatservice.cz. Their many years of experience in property management will save you plenty of sleepless nights when preparing the flat and selecting a suitable tenant. And afterwards they will handle everything without your involvement – from drawing up the lease and transferring utilities, through regular maintenance and minor repairs, to taking the flat back and checking its condition.
