Authored by the expert who managed and guided the team behind the Czechia Property Pack
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What is happening in Prague’s real estate market? Are prices on the rise or decline? Is the city still a magnet for international investors? How are local government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers across Prague and beyond. Maybe you’re curious about the same things.
We know this because we stay closely connected with local experts and people like you, exploring the Prague real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed the mark or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
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1) Stricter regulations on platforms like Airbnb will reduce short-term rental yields
In recent years, particularly in 2023 and 2024, Prague has seen a significant increase in the enforcement of short-term rental regulations. This has been particularly evident in areas like Prague 1, where authorities have intensified monitoring efforts to ensure compliance with legal obligations. The aim is to protect residents from the disruptions often caused by short-term rentals.
As a result of these stricter regulations, there have been reports of fines and penalties imposed on illegal short-term rentals. The City Council of Prague 1 has taken steps to integrate methodological recommendations into their processes, allowing for direct inspections and stricter control over accommodations. This has led to increased enforcement and potential fines for those not complying with the new rules.
Moreover, data has shown a decline in the number of Airbnb listings in Prague, particularly in the historical center where a high concentration of short-term rentals exists. Landlords owning multiple apartments make up a significant portion of these listings, and the stricter regulations could lead to a further decline in available short-term rental properties.
Additionally, the Czech government's plan to introduce an electronic system for short-term rental registration and licensing is expected to impact profitability. This system, set to be fully operational by July 2025, aims to curb the opaque nature of platforms like Airbnb, increasing compliance costs and reducing the number of listings.
Sources: Prague Daily News, Enso Connect, The Mayor
2) Rental yields in Prague 1 will fall as property prices rise faster than rents
In 2023, property prices in Prague 1 saw a significant rise, with some two-bedroom apartments nearing €1 million. This increase in property prices wasn't matched by rental income growth, resulting in a rental yield of about 2.26%. This means that while property values were climbing, rental income wasn't keeping pace.
The Residential Real Estate Price Index for early 2024 showed a 1.18% year-on-year increase, which was slower than in previous years. This data highlights the growing gap between property price hikes and rent growth, indicating that property values were appreciating faster than rental rates.
Reports from real estate agencies, like Engel & Völkers, noted that rental prices in Prague returned to pre-2020 levels by 2022 and then stabilized in the first half of 2023. Although there was a slight correction, rental prices were only expected to increase gradually by 5-10% in the first half of 2024, further emphasizing the slower growth in rental income compared to property prices.
Sources: Prague Daily News, Engel & Völkers, Global Property Guide
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’s property prices will stabilize following a period of rapid growth
In recent years, Prague's residential property market has experienced rapid growth, but signs of stabilization have started to emerge. In 2023, the aggregate index of real estate in the Czech Republic showed a slight decrease in overall property prices, with dwelling prices decreasing by 5.6% and family house prices only slightly increasing by 1.0%.
By 2024, the growth rate of new-build apartment prices in Prague began to slow down, indicating a cooling market. This trend was supported by the increased supply of new residential developments, with real estate groups planning to build over 800 new rental units in districts like Prague 9 and Prague 10, which helped relieve some pressure on the housing market.
Additionally, rising interest rates have made mortgages less affordable, leading to reduced demand for residential properties. This, combined with economic forecasts predicting slower growth in disposable incomes, has contributed to a more cautious approach from potential buyers, further stabilizing property prices.
Sources: Czech Statistical Office, Prague Daily News, Deloitte Rent Index
4) Central Prague rents will increase due to high demand and limited supply
Rental prices in central Prague are climbing as demand outpaces supply.
By late 2024, renting a studio in the heart of Prague will set you back CZK 22,000, while a three-bedroom apartment will cost around CZK 38,555. This surge reflects the city's growing allure and the increasing number of people wanting to live there.
Prague's charm isn't just in its cobblestone streets and historic architecture; it's also in its booming economy. The metro area population is expected to hit 1,332,000 by 2025, a slight uptick from the previous year. This growth is largely due to new job opportunities drawing people in, further driving up the demand for housing.
But here's the catch: central Prague isn't expanding as fast as its population. Strict historical preservation laws make it tough to build new homes, and the few new properties that do pop up are getting pricier each quarter. This means fewer places to rent, even as more people are looking.
With high occupancy rates, finding a rental in central Prague is like finding a needle in a haystack. The limited supply of new housing, coupled with the city's popularity, is pushing rents higher. It's a classic case of demand outstripping supply.
So, if you're considering a move to Prague, be prepared for a competitive rental market. The city's unique blend of history and modernity continues to attract newcomers, but the housing market is struggling to keep up.
Sources: Macrotrends, Prague Daily News, Expats.cz
5) Virtual reality tours will become a standard method for showcasing properties to potential buyers
Virtual reality tours have become a common tool for showcasing properties to potential buyers due to several compelling reasons. In the past, specifically around 2023 and 2024, the global market value of VR in real estate was projected to reach $2.6 billion by 2025, showing a significant increase from $800 million in 2020. This growth indicated a strong trend towards the adoption of VR technology in the real estate sector.
Moreover, statistics from those years showed that more than 50% of adults had taken a virtual tour, and 67% of home buyers wanted a virtual tour when looking at a listing. This demand was further supported by the fact that listings with virtual tours received 87% more views, and potential buyers spent 5-10 times longer on websites with a virtual tour than those without. Such engagement metrics highlighted the effectiveness of virtual tours in capturing buyer interest.
Additionally, advancements in VR technology made it more accessible and affordable, allowing remote property tours and face-to-face interactions with agents, regardless of location. This technology provided a lifelike experience that traditional methods could not replicate, making it a preferred choice for many buyers. Real estate agencies in Prague, like Prague Lux, were early adopters of this technology, using it to capture spaces from all possible angles and offering virtual scanning services that rendered properties into interactive, fully-immersive spaces.
Sources: PhotoUp, EZ Real Estate Tools, Expats.cz
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6) Demand for rental properties near universities will rise as more international students arrive
In 2023 and 2024, Prague saw a significant increase in the number of international students, with 26,512 students enrolled in higher education institutions. This influx of students naturally leads to a higher demand for housing, especially near universities where they study.
International students often prefer to live close to their universities for convenience and easy access to academic facilities. This preference creates a concentrated demand for rental properties in these areas, making them highly sought after.
Moreover, the shortage of student accommodation in Prague exacerbates this demand. With only 28,550 beds available for approximately 75,000 university students, including those from abroad, the need for additional rental properties becomes even more pressing.
Rental prices in Prague have been climbing steadily, particularly in areas surrounding universities. This trend is driven by the high demand from international students, who contribute significantly to the local housing market.
Sources: Erudera, Czech Universities, Radio Prague International
7) Prague's metro expansion will boost property values in newly connected areas
The expansion of Prague's metro system is expected to increase property values in newly connected areas due to several key factors. First, historical data from Valuo's analysis in 2023 shows a significant 68% increase in property prices along the green line (Line A) over the past seven years. This trend underscores the strong demand for housing near metro stations, which is likely to continue with the new expansions.
Additionally, the Engel & Völkers Market Report from 2024/2025 highlights that government initiatives to improve infrastructure, such as new metro lines, will enhance connectivity and drive up property values in affected areas. This is supported by the limited availability of land for new developments in central areas and Prague's strong economic performance, which are expected to contribute to rising property prices.
Moreover, case studies from other cities, like the Second Avenue Subway extension in New York City, demonstrate that metro expansions can lead to property value appreciation. These studies show that properties near new metro lines often receive price premiums, indicating a positive impact on housing prices.
Sources: Valuo’s Property Price Trends, Spatiotemporal Effects of Proximity to Metro Extension on Housing Prices, Engel & Völkers Market Report
8) Asian investors will play a bigger role in Prague's real estate market
In recent years, we've seen a noticeable increase in Asian investment in European real estate, with a 26% rise in cross-border capital from Asia and the Pacific into Europe in 2023. This trend highlights a growing interest from Asian investors in the European market, including Prague.
The increasing number of direct flights between major Asian cities and Prague, although not explicitly detailed, suggests improved connectivity. This is supported by the rise in tourism from Asia to Prague, which often precedes investment interest as tourists explore potential opportunities.
Asian real estate investment firms have shown a growing interest in Central Europe, including the Czech Republic. They are actively analyzing new opportunities, indicating a sustained interest in the region. Additionally, Asian investors are diversifying their portfolios internationally, aligning with their interest in European markets like Prague.
Sources: Colliers, Asia Real Estate Summit, Global Property Guide, Statista
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) Prague's historic properties will attract more foreign interest as they are viewed as stable investments
Foreign interest in Prague's historic properties is expected to rise as they are seen as stable investments. This trend is supported by the increasing property prices in Prague's historic districts, such as Prague 9 and Prague 10, where prices per square meter were notably high in 2023. The stability of the Czech real estate market, with property prices projected to rise by 5-10% in 2025, further enhances the appeal of these investments.
Additionally, the growing number of international real estate agencies operating in Prague indicates a heightened interest from foreign investors. This is complemented by the global trend towards investing in stable and tangible assets, which includes historic properties. The presence of Prague in international real estate investment forums and its frequent inclusion in lists of top European cities for property investment also highlight its attractiveness.
Moreover, media coverage often portrays Prague as a safe and attractive investment destination, which is likely to draw more foreign investors to the city's historic properties. The increasing number of tourists visiting Prague each year boosts property demand, making historic properties even more appealing to investors.
Sources: Deloitte, HVS, Global Property Guide
10) Eastern European buyers will become more prominent in Prague’s residential market
Eastern European buyers are increasingly eyeing Prague's residential market.
They've been snapping up properties at prices around 20% lower than in early 2022, often using their own funds. This trend is fueled by the economic stability and growth in many Eastern European countries, which has led to more disposable income for investing in foreign real estate markets like Prague.
Moreover, the Czech Republic is seeing a surge in cross-border investments, with a significant chunk coming from Eastern Europe. This influx highlights the strong presence of domestic capital in the market. Favorable exchange rates for Eastern European currencies against the Czech koruna have also boosted their purchasing power.
Real estate agencies are catching on, likely ramping up their marketing efforts to attract these buyers. Reports from these agencies show a rise in inquiries and transactions from Eastern European clients, underscoring the growing interest.
Prague's appeal is not just about the numbers; it's also about the lifestyle and opportunities the city offers. The vibrant culture, rich history, and strategic location make it a desirable destination for investors looking for more than just a property.
Sources: Engel & Völkers, Engel & Völkers, The Wandering Investor
11) Updated property tax laws will affect the appeal of certain neighborhoods
Changes in property tax laws can significantly influence the attractiveness of certain neighborhoods. For instance, in 2024, the Czech Republic made notable changes to the Real Estate Tax Act, such as abolishing the 1.5 coefficient for holiday homes, garages, and business structures. This could have led to shifts in neighborhood popularity, as different areas might have been affected differently by these changes.
In Prague, the tax rate for apartments is 2 CZK per square meter, while houses have an additional 0.75 CZK for each floor above ground. This variation in tax rates can make some neighborhoods more appealing than others, depending on the type of property and its size. Additionally, the municipality coefficient in Prague is 5, compared to 3.5 in Pilsen, which could affect the overall tax burden and influence neighborhood desirability.
Surveys of property buyers often reveal their sensitivity to changes in property tax rates. Buyers might prefer neighborhoods with lower tax rates, impacting the attractiveness of those areas. Real estate market reports can also highlight trends in property values relative to tax rates, indicating whether higher taxes lead to decreased property values and attractiveness.
Expert opinions from real estate analysts provide insights into how property tax changes impact neighborhood attractiveness. Statistical correlations between tax rates and property demand offer quantitative evidence of these impacts. For example, a significant decrease in property sales in areas with increased tax rates could indicate a loss of attractiveness.
Sources: Danovky, Conbiz, Danovky, Sciendo
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12) Suburban rental yields will rise as more people look for affordable living options
In recent years, we've seen a noticeable shift in where people choose to live, especially in places like Prague. The main reason for this change is the rising cost of living in urban areas. Back in 2023 and 2024, many households in Prague were spending a large chunk of their income just on housing. This made suburban areas, which are generally more affordable, a more attractive option for many people.
Another factor contributing to this trend is the significant increase in property prices in central Prague. Over the past five years, these prices have surged by 50%, pushing residents to look for cheaper alternatives in the suburbs. This shift in demand is likely to lead to higher rental yields in suburban areas, as more people move there seeking affordable living options.
Additionally, improved transportation links have made it easier for people to live in the suburbs while still working in the city. This accessibility, combined with the desire for larger living spaces at lower costs, has made suburban living more appealing. As a result, we can expect rental yields in these areas to increase as demand continues to grow.
Sources: Prague Morning, Expats.cz, Expats.cz
13) Property prices in outer districts may dip slightly as demand moves inward
Central Prague is becoming the hot spot for property buyers.
In 2023 and 2024, the sales of new buildings in these areas almost doubled, and older flats saw a significant boost too. This shows a clear preference for living in the city's heart. Improved public transportation is a big reason for this shift. The Prague Metro, with its frequent services, has made central areas more accessible and attractive, making it easier for people to commute and enjoy what central Prague offers.
Businesses and cultural institutions are also moving to central Prague, adding to the demand. Developments like the planned complex by Zaha Hadid Architects are set to transform these areas into bustling hubs of activity. This migration is drawing more people and businesses inward, making central Prague even more appealing.
Some outer districts will experience a slight decline in property prices as demand shifts inward. This trend is reshaping the real estate landscape, with central Prague becoming the focal point for both residential and commercial interests.
For those considering buying property, central Prague offers a vibrant lifestyle with easy access to amenities and a thriving business environment. The ongoing developments and the city's charm make it a compelling choice for potential buyers.
Sources: CBA Monitor, Prague Experience, Outlook Travel Mag
14) Luxury property prices in central Prague will keep rising due to limited supply
Luxury property prices in central Prague are on the rise and show no signs of slowing down.
One big reason is the limited space for new developments. Central Prague is a historic area with little room left for new buildings, making existing properties more valuable.
Strict historical preservation rules add to this scarcity. These regulations keep the area's charm intact but make new construction challenging, boosting the demand for existing luxury homes, especially those with historical significance.
Foreign investors are also eyeing Prague. Buyers from Germany, Russia, and Asia are increasingly interested in the city's luxury market, adding to the demand.
Local high-net-worth individuals are joining the fray, thanks to a strong economy and low unemployment. Rising disposable incomes mean more locals can afford these upscale properties.
With all these factors combined, it's no wonder that luxury properties in central Prague are hot commodities.
Sources: 20 Countries, At Home Network, 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) Prague 5 will see rising long-term rental yields as the area gains desirability
In recent years, Prague 5 has become a more attractive area for investment, largely due to rising property prices. The average price per square meter has seen significant growth, making it competitive with other central districts. This trend suggests that the area is becoming more desirable, which can lead to increased rental yields.
Another key factor is the increased investment in infrastructure and public transport. Improvements in public transportation links and the development of new amenities enhance the quality of life for residents. This makes the area more appealing to both residents and professionals, potentially driving up demand for rental properties.
Additionally, Prague 5 is experiencing an influx of professionals and expatriates, driven by the city's growing economy and job market. This increased demand for housing, particularly rental properties, is a crucial factor in rising rental yields. The area's improved amenities and services, such as schools, parks, and shopping centers, further contribute to its attractiveness.
Sources: Engel & Völkers Germany: Market report 2024/2025 · Prague, Expats.cz: Property prices continue to rise in Czechia – especially Prague
16) Demand for accessible, senior-friendly housing will rise due to an aging population
In recent years, we've seen a noticeable increase in the elderly population in Prague. Back in 2023, people aged 65 and over made up 20.5% of the Czech Republic's population. This trend is expected to continue, with projections indicating that by 2040, there will be more than 200 seniors for every 100 children. This shift in demographics is a clear sign that the demand for senior-friendly housing will rise.
Life expectancy has also been on the rise. In 2023, men were expected to live up to 77 years and women up to 83 years. These numbers are set to increase even further, reaching 89.4 years for men and 92.6 years for women by the end of the century. As people live longer, the need for housing that accommodates their changing needs becomes more pressing.
Moreover, the Czech Statistical Office has highlighted the growing post-productive age group, which will require support from a shrinking productive age group. This demographic change emphasizes the necessity for accessible housing solutions tailored to seniors. Additionally, the real estate market has shown a shortage of senior-friendly housing, especially in Prague, where the aging population is concentrated.
Sources: Eurydice, Brno Daily, NIC MAP Vision
17) Demand for eco-friendly housing will rise as sustainable living becomes more popular
In recent years, there's been a noticeable shift towards sustainable living, and this trend is expected to drive demand for eco-friendly housing. In Prague, for instance, the development of the city's first blue-green district by Skanska highlights a growing focus on sustainability. This district incorporates innovative elements like rainwater management and sustainable energy, which are becoming increasingly important to homebuyers.
Moreover, consumer surveys have shown that people are now more aware of environmental issues and prefer homes that minimize carbon footprints. This shift in consumer attitudes is pushing the real estate market to adapt, with more projects aiming for green certifications like LEED and BREEAM. These certifications ensure that buildings operate efficiently and have minimal environmental impact, which is a big draw for eco-conscious buyers.
Additionally, government initiatives like the Prague Climate Plan 2030 are promoting sustainable construction practices. By offering incentives and setting goals to reduce CO2 emissions, the government is encouraging the development of eco-friendly housing. This aligns with the increased investment in renewable energy sources, such as the Clean Energy for Prague programme, which supports the use of photovoltaics in residential properties.
Sources: Living Architecture Monitor, Skanska, The Madrona Group
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.