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What will happen in Prague’s real estate market? Will prices go up or down? Is Prague still a hotspot for foreign investors? How is the Czech government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Prague, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Rental yields in central Prague will drop slightly as property prices rise faster than rents
In recent years, particularly in 2023 and 2024, property prices in central Prague have been on a steady rise. For instance, in early 2023, the average cost per square meter in Prague reached CZK 92,200 (€3,829), with some areas like Prague 1 seeing two-bedroom apartments nearing €1 million. This trend continued with new apartments in Prague 8 experiencing a 10% price increase, while Prague 1 saw a 5% increase.
On the other hand, rental prices have not kept pace with this rapid increase in property values. The rental yield in Prague 1, for example, is about 2.26%, indicating that rental income isn't growing as fast as property values. Rental prices in Prague saw a year-on-year increase of 2% for 1+1 apartments and 8% for 2+kk apartments, but these increases are not matching the speed of property price hikes.
Historical data supports this trend, with the Czech Statistical Office showing a 1.18% year-on-year increase in the Residential Real Estate Price Index for early 2024, further indicating that property prices are rising faster than rents. This gap between property price growth and rental income growth is a key factor in the slight decline of rental yields in central Prague.
Sources: Expats.cz, Engel & Völkers
2) Short-term rental demand in Prague will rise, driving up rental prices
In recent years, Prague has experienced a significant increase in tourism. In 2023, the city welcomed approximately 5.45 million visitors in just the first three quarters, marking a 28% rise compared to the previous year. This trend continued, with expectations of reaching around 7 million tourists by the end of 2023.
International arrivals made up a large portion of these visitors, with 78% coming from outside the Czech Republic. Notably, there was a substantial increase in tourists from Asia, particularly South Korea and Taiwan. This influx of international tourists has contributed to the growing demand for short-term rentals.
Platforms like Airbnb have become increasingly popular among tourists visiting Prague. The average daily rate for Airbnb accommodations in the city rose by about 25% over the past two years, from CZK 2,500 to CZK 3,200 per night. With 8,153 active Airbnb listings and a median occupancy rate of 79%, the demand for short-term rentals is evident.
Sources: Expats.cz, Expats.cz, ETIAS.com, Airbtics.com
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Czech Republic versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Prague rents will increase as it becomes more popular with expats
Rents in Prague are on the rise as the city becomes a hotspot for expatriates.
Over the past few years, Prague has seen a surge in demand for flexible office spaces, with a 23% increase in 2023 compared to the previous year. This boom signals a growing interest from international companies and workers, which in turn fuels the demand for housing. As more global businesses set up shop, the city becomes even more appealing to expatriates looking for new opportunities.
The influx of foreigners, including a significant number of Ukrainians, has been remarkable, with 1.12 million legally residing foreigners in 2022. This growing population is putting extra pressure on the rental market. As more people flock to Prague, the demand for rental properties naturally spikes, leading to higher rents.
Buying a home in Prague is becoming less affordable due to rising property prices, pushing more people towards renting. In 2023, rents climbed steadily, with prices increasing by 5 to 6 percent. By the end of the year, the average cost for a typical 50-square-meter apartment hit around CZK 20,000 per month. This trend is worsened by the limited supply of new housing and high occupancy rates in existing rentals, especially in central districts.
Prague's central districts are particularly affected, where the demand for housing is fierce, and the supply is tight. The limited availability of new housing projects means that existing rentals are almost always occupied, driving up prices even further. This makes it challenging for newcomers to find affordable places to live, especially in the heart of the city.
As Prague continues to attract international attention, the rental market is expected to remain competitive. The city's charm, combined with its growing business opportunities, makes it a prime destination for expatriates. This ongoing trend suggests that rents will keep climbing as more people choose to call Prague home.
Sources: Expats.cz, ETIAS, Property Forum
4) Demand for rental properties in Prague will rise as more international students arrive
Prague is becoming a hotspot for international students, with numbers climbing steadily.
Take Charles University, for example, which had over 11,000 international students in 2023. This surge is creating a buzz in the rental market, especially around university areas. With only 28,550 beds available for about 75,000 students, the demand is clearly outpacing supply.
Most international students are here temporarily, so they prefer renting over buying. This trend is pushing up the demand for rentals in student-heavy neighborhoods, making it a landlord's market.
Rental prices are on the rise, especially in student-favored areas. In 2023, prices jumped by 5 to 6 percent, with the average cost hitting CZK 395 per square meter. This makes it a competitive scene for anyone looking to rent.
For those considering investing in property, this influx of students is a golden opportunity. The steady stream of international students means consistent demand for rental properties, ensuring a reliable return on investment.
So, if you're thinking about buying property in Prague, keep an eye on these student-populated areas. The rental market is thriving, and with more students arriving each year, the demand is only set to grow.
Sources: Erudera, Charles University
5) Foreign buyers will target central Prague properties for their investment potential
Foreign buyers are increasingly focusing on central Prague properties due to their strong investment potential. In recent years, property prices in central Prague have shown a consistent upward trend. For instance, in the first half of 2024, there was a notable 1.57% year-on-year growth in property prices, which was higher than in other regions of the Czech Republic.
Luxury property prices are expected to rise by 3% to 7% in 2025, driven by high demand and limited supply. This is particularly true in historic districts like Malá Strana and Staré Město, where land for new builds is scarce, further driving up prices. These areas are not only rich in history but also in investment potential, making them attractive to foreign investors.
The rental market in Prague is also robust, with high demand for short-term rentals, especially in central locations. This trend is expected to continue, leading to increased rental yields. The combination of high rental yields and the potential for property appreciation makes central Prague an attractive destination for foreign investors seeking rental income.
Prague's vibrant tech scene and growing startup ecosystem attract young professionals and expats, increasing demand for short-term rentals in central locations. Additionally, as a popular tourist destination, Prague sees a constant influx of visitors, further boosting the demand for short-term rentals in central areas.
Central properties in Prague are expected to appreciate in value due to their strategic location and high demand. Historical data shows that these properties have consistently appreciated over the years, reinforcing their status as a prime investment location for foreign buyers.
Surveys and media coverage frequently highlight Prague as an attractive destination for luxury real estate investment, drawing in high-net-worth individuals and foreign investors. The city's cultural and economic significance, combined with its stable political environment, make it a compelling choice for investment.
Sources: Global Property Guide, Lloyds Bank Trade
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6) Rental yields in Prague will rise as more young professionals relocate to the city
As more young professionals move to Prague, rental yields are likely to increase due to several factors. First, the city has seen a significant rise in the number of young professionals, particularly from Ukraine, contributing to population growth. By the end of 2022, Ukrainians were the largest group of foreigners in Prague, with numbers reaching 170,000.
This influx of young professionals has led to an increasing demand for rental properties, especially in central and desirable neighborhoods. According to Deloitte's Rent Index for the second quarter of 2024, rental prices in Prague have been rising, with the most expensive areas being Prague 1, Prague 2, and Prague 3.
Moreover, the growing job market in Prague, driven by sectors like automotive, manufacturing, and information technology, continues to attract more young professionals. This economic growth is supported by the presence of international companies setting up offices in the city, further increasing the demand for skilled labor and rental properties.
Sources: ETIAS, Vistra, Expats.cz
7) More foreign investors will enter Prague’s residential market because of favorable economic conditions
Prague is becoming a hot spot for foreign investors in the residential market.
One reason is the rising property prices in the city. For example, in early 2024, the average price for apartments in Prague 1 jumped by 5% to CZK 252,900 per square meter. This shows a strong market potential and growing demand, making it an attractive option for those seeking profitable investments.
Foreign direct investment in the Czech Republic is also on the rise. In 2023, CzechInvest helped secure ten new investment deals, leading to over four thousand new jobs and more than EUR 740 million in investments. This highlights the Czech Republic's favorable environment for high-value foreign investments, which naturally extends to Prague's residential market.
Low interest rates on mortgages are another draw for foreign investors. With projections suggesting a year-on-year increase in property investments of up to 15%, partly due to these reduced rates, the financial climate is ripe for attracting foreign investment in residential properties.
Prague's charm and strategic location in Europe add to its appeal. The city offers a unique blend of historical allure and modern amenities, making it a desirable place to live and invest. This combination of factors contributes to the growing interest from international buyers.
Additionally, the Czech Republic's stable economy and political environment provide a secure backdrop for investment. This stability, coupled with the city's vibrant culture and lifestyle, makes Prague a compelling choice for property investors looking for both security and growth potential.
Sources: Expats.cz, Czech Business Guide, Expats.cz
8) Green buildings will become more popular with Prague investors due to tax incentives
Tax incentives for green buildings are set to increase their popularity among Prague property investors for several reasons. First, the Czech government's New Green Savings Program offers substantial support for energy-efficient renovations and constructions, making it financially attractive for investors to go green.
Moreover, the Prague Climate Plan 2030 and the Circular Prague 2030 Strategy highlight the city's commitment to sustainable development, which is likely to boost investor confidence in the long-term viability of green buildings. These plans not only aim to reduce CO2 emissions but also promote the use of renewable energy sources, further enhancing the appeal of eco-friendly properties.
Additionally, the growing awareness and concern about environmental sustainability among consumers suggest a shift in market demand towards eco-friendly properties. This trend is supported by increased media coverage on the benefits of green buildings, which helps to educate and influence both investors and potential buyers.
Furthermore, the New Green Savings Program demonstrates the cost efficiency of green buildings, with potential savings of up to 50% on total expenses. This financial benefit, combined with the long-term value appreciation of sustainable properties, makes green buildings an attractive investment option.
Sources: Prague Climate Plan 2030, Circular Prague 2030 Strategy, New Green Savings Program
We have made this infographic to give you a quick and clear snapshot of the property market in the Czech Republic. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Stricter rental rules in Prague will shift focus from short-term rentals to long-term leases
In recent years, Prague has seen a significant shift in its rental market dynamics, primarily due to stricter rental regulations. These regulations have been designed to address the challenges posed by the short-term rental market, which has been booming in the city. The Czech government introduced new laws that limit the number of days a property can be rented out to tourists and require registration through the eTurista platform. This has made short-term rentals less attractive to landlords, who are now more inclined to opt for long-term leases.
The demand for long-term rentals in Prague has been on the rise, driven by a growing population and limited housing supply. In 2023, the population of Prague's metro area reached 1,323,000, which naturally increased the demand for housing. This surge in residents has pushed landlords to favor long-term leases, as they offer more stable and predictable income compared to the uncertainty of short-term rentals. Real estate agencies have also noted this trend, highlighting the stability and predictability of long-term rental income as a key factor in landlords' decisions.
Moreover, the number of Airbnb listings in Prague has significantly decreased, with a notable reduction since 2019. This decline is partly due to the shift from short-term to long-term leases, as landlords seek to avoid the increased oversight and enforcement measures imposed by the city. Prague 1, for instance, has intensified its monitoring of short-term rentals, integrating methodological recommendations into internal processes to ensure compliance. These efforts have further encouraged landlords to transition to long-term rentals, aligning with the preferences of tenant advocacy groups that support rental stability.
Sources: Prague Morning, Prague Daily News, Karlobag.eu
10) Prague's transport expansion will boost buyer interest in previously hard-to-reach areas
In recent years, Prague has seen a significant expansion in its public transport network, which has made previously less accessible areas more attractive to potential buyers. This expansion includes new metro lines and tram routes, which have been part of the city's urban development plans. As a result, property values in areas with new transport links have increased substantially.
For instance, property prices around the green line (Line A) have risen by 68% over the past seven years. This increase is a clear indicator that improved transport access can lead to higher property values. The Metro Index 2024 further supports this trend, showing that renovated apartment prices near metro stations have consistently increased year-on-year.
Moreover, the demand for housing near metro stations remains high, even in the face of economic uncertainties. This demand is driven by the convenience and reduced commute times that come with living near public transport. As new transport projects continue to develop, such as the construction of a new metro line (D), we can expect these areas to become even more desirable.
Sources: Prague Morning, Expats.cz, Expats.cz
11) Interest from Asian buyers in Prague's real estate market will grow as they seek European opportunities
Prague is catching the eye of Asian buyers eager for European real estate.
One big reason is the surge in Asian tourists flocking to Prague, with a notable 28% jump in 2023. This influx is not just boosting tourism but also driving up rental prices, making property investments more appealing. Imagine walking through the charming streets of Prague and seeing the potential for a thriving rental market.
Meanwhile, property prices in major Asian cities like Singapore and Hong Kong are sky-high. This is pushing investors to seek more affordable options abroad. In 2023, Singaporean investors poured a significant amount into European real estate, looking for better deals and returns.
The Czech commercial real estate market is also buzzing with activity. From January to November 2024, transactions hit €1.36 billion, matching the previous year's total. Experts predict that investment volumes will exceed €2 billion in 2025, showing a strong upward trend.
Asian investors are particularly drawn to the Czech Republic because of its stability and growth potential. The country's steady economic environment and promising future make it an attractive destination for those looking to diversify their portfolios.
With all these factors in play, it's no wonder Prague is becoming a hotspot for Asian investors. The city's unique blend of history, culture, and economic opportunity is hard to resist.
Sources: Savills
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12) Eco-friendly residential development in Prague will grow due to new environmental regulations
In recent years, Prague has been making significant strides towards environmental sustainability, particularly in the realm of residential buildings. One of the key drivers of this shift has been the increased government incentives for green building practices. In 2025, the City of Prague allocated nearly 43 million Czech crowns for environmental protection projects, which include initiatives that promote eco-friendly construction and community sustainability.
The Action Plan 2023–2025 for Prague set clear objectives to reduce greenhouse gas emissions and promote a circular economy. This plan emphasizes the reuse and recycling of materials and the use of low-carbon footprint materials like wood. By prioritizing renovations over new constructions, the city is encouraging more sustainable building practices. These efforts are supported by the growing number of certifications for green buildings, such as the high LEED scores achieved by projects like Skanska's Parkview.
Moreover, the Czech building materials industry is increasingly focusing on eco-friendly products. Companies like Cemex Czech Republic and Wienerberger Česko are developing innovative, sustainable materials, which further supports the construction of eco-friendly residential buildings. The heightened media focus on environmental sustainability in real estate, along with government campaigns promoting sustainable urban development, has also played a crucial role in encouraging eco-friendly construction.
Sources: Action Plan 2023–2025, Prague Daily News, Skanska, AeroLeads
13) Luxury property yields in Prague will stay stable, drawing in long-term investors
The luxury property market in Prague is a stable investment choice for long-term investors.
Prague's luxury real estate is in high demand, thanks to a limited supply and interest from wealthy buyers. This trend is evident as the Czech luxury retail market saw an 8.1% sales increase in 2023, underscoring the appeal of high-end properties.
In sought-after areas like Malá Strana and Staré Město, rental prices for luxury homes have either held steady or risen. This is happening even though property prices are climbing faster than rents. The city's tech and startup boom is drawing skilled workers and young professionals, keeping vacancy rates low and rental yields stable.
Prague's growing reputation as a cultural and economic center is attracting foreign investors. They are drawn to the city's stable political climate and rich cultural heritage. The Czech government also supports foreign investment with favorable economic policies, adding to the allure of luxury properties.
With a limited number of new luxury developments, existing properties are holding their value. This scarcity, combined with the city's appeal, ensures that luxury real estate remains a sound investment.
Investors are particularly interested in Prague because of its favorable economic conditions and supportive policies. These factors make the city a prime location for those looking to invest in luxury real estate.
Sources: Statista, KarloBag, Engel & Völkers
14) Mid-range property prices in Prague will grow steadily due to strong local demand
The mid-range property market in Prague is set for steady price growth, mainly fueled by local demand.
Prague's population has been on the rise, with a 0.6% increase as of March 2023, which naturally boosts housing demand. This growing population is a key driver for the property market, as more people look for homes in the city.
Residents in Prague enjoy a strong economic position, with a purchasing power index of 132.5 in 2022. This means they have the financial means to invest in real estate, making the market more robust. The city's low unemployment rate, which was 2.8% in December 2024, further supports this trend, indicating a stable job market that encourages property investments.
Land for new developments in central Prague is scarce, which can push property prices up and increase the appeal of existing mid-range homes. This limited availability of land is a significant factor in the market's dynamics.
Local buyers are showing more interest in mid-range properties, with a 6.7% rise in sales volume in Q1 2023 compared to the previous year. This uptick in sales highlights the growing demand from residents who are keen to invest in the city's real estate.
Sources: Global Property Guide, Prague Daily News, Luxent, Engel & Völkers
We made this infographic to show you how property prices in the Czech Republic compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Luxury property prices in Prague will rise moderately as demand stays steady
In recent years, Prague's luxury real estate market has been experiencing a moderate price increase. This trend is largely due to stable demand from both local and international buyers. High-net-worth individuals have shown a growing interest in Czech properties, particularly in luxury segments, as evidenced by the significant rise in foreign direct investment in real estate activities in 2022.
The Czech Republic's stable economic environment has played a crucial role in supporting this demand. With low inflation rates and favorable exchange rates, the country remains an attractive location for luxury property investments. Additionally, the scarcity of land in prime areas like Malá Strana and Staré Město has contributed to the rising prices of luxury properties, as limited availability often leads to increased competition among buyers.
Moreover, the consistent rental yields in Prague's short-term vacation rental market have attracted investors, further supporting the demand for luxury properties. Real estate agencies have reported stable demand in the luxury sector, with new commercial rental contracts reflecting a strong market. Consumer confidence indices also show stability among affluent buyers, ensuring that the demand for luxury properties remains steady.
Sources: Engel & Völkers, Luxent, Global Property Guide
16) Demand for senior-friendly housing in Prague will grow as the population ages
The aging population in Prague is becoming a significant factor in shaping housing needs. In 2023, 20.5% of Prague's population was aged 65 and over, and this is projected to increase to 22.3% by 2025. This growing demographic will naturally drive demand for housing that caters to their specific needs.
As people age, they often face mobility and health challenges, which means they require homes that are accessible and equipped with features that make daily living easier. This includes things like step-free access, wider doorways, and bathroom modifications. Additionally, the number of people aged 85 and over is expected to triple by 2050, further increasing the need for healthcare and assisted living facilities.
Moreover, there is a rising trend in intergenerational housing projects in Prague, where students can live in nursing homes at reduced rent in exchange for volunteering. This not only provides affordable housing options for students but also fosters a supportive community for seniors, addressing their preference for social interaction and support.
Sources: Strategic Framework for Social Ageing, Expats.cz, Crescon, Savills
17) Rental yields in Prague's suburbs will rise as demand for larger living spaces increases
In recent years, we've seen a significant shift in how people work and live, especially since 2023 and 2024. The rise of remote work has led many to seek larger living spaces, a trend that is evident not just in Prague but globally. This shift is largely due to the flexibility remote work offers, allowing people to live farther from city centers where larger homes are more affordable and available.
Suburban areas in Prague have become increasingly attractive for those looking for more space. Real estate agencies, like Engel & Völkers, have reported a lively rental market with high demand, indicating a growing preference for suburban living. This is partly because these areas offer larger homes with outdoor spaces, which have become highly desirable as people prioritize quality of life and space.
Moreover, the Czech Republic has seen a noticeable movement of people from urban to suburban areas, driven by improved internet connectivity and the reduced necessity of being close to offices. This population shift is further supported by government investments in infrastructure, which attract new businesses and startups, fueling economic growth and increasing rental demand in these regions.
Sources: Engel & Völkers, Expats.cz, European Central Bank
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.