“Mortgages are primarily provided to high-income households,” confirmed Jakub Seidler, a member of the CNB’s banking board after their June meeting. The net monthly income of households currently taking out mortgages exceeds 90,000 crowns, while the average mortgage payment is approximately 22,000 CZK.

The average newly provided mortgage amount rose to four million crowns in February this year—nearly 20% higher than a year ago. This reflects property prices that increased by more than 10% last year on average. For perspective, a new 70-square-meter apartment in Prague now costs 11.8 million crowns.

Meanwhile, wage growth remains considerably lower. Last year, wages rose nominally by an average of 7%, and in the first quarter of this year, the average gross wage was 46,924 crowns—a year-on-year increase of 6.7%, with real wage growth of 3.9% after accounting for inflation. Property prices are rising primarily due to housing shortages, increased construction costs, and relatively low construction rates. Last year saw the completion of the fewest new apartments since 2017—just 30,274, which is 20% less than the previous year. “The high inaccessibility of housing represents a serious economic problem for the Czech Republic in the form of lower household consumption and reduced labor mobility,” noted economist Jakub Komárek.

Created by the team of CzechTrade Shanghai
Source: Czech Daily