Why More Expats Are Buying Instead of Renting in Prague (2025 Market Update)
In recent years, Prague has become one of the most desirable cities in Central Europe—not only for tourists and international students, but increasingly for long-term foreign residents. In 2025, a growing number of expats are choosing to buy property instead of renting.
While renting once seemed like the safer, more flexible option, the current combination of high rents, falling interest rates, and strong property appreciation is shifting that equation. For many, ownership now offers greater financial sense and long-term stability.
Renting is No Longer the Affordable Option
One of the key reasons behind this shift is the steep rise in rental prices across Prague. In 2024, the average rent in the city reached CZK 412 per square meter, making Prague the most expensive rental market in the Czech Republic. Some neighborhoods have seen even sharper increases, particularly in areas popular among young professionals and international residents.
Over the past year, average rents increased by as much as 17%, and in certain city districts, competition for available apartments has become intense, with some listings reportedly receiving over 100 inquiries. At the same time, mortgage payments for similarly sized properties—especially those bought with a longer fixed interest period—have become comparable to monthly rent.
For expats planning to stay in Prague for more than just a few years, continuing to rent increasingly feels like paying more for less.
Mortgage Conditions Have Improved
Another key driver of the trend toward ownership is the significant improvement in mortgage conditions. In early 2023, mortgage interest rates hovered between 5% and 6%, making borrowing expensive and pushing many potential buyers toward the sidelines.
But by mid-2025, rates have dropped significantly—some banks are now offering rates between 4.2% and 4.7%, depending on the client’s profile and the type of loan. This is in part due to the Czech National Bank’s easing of its base interest rate, which has fallen from 7% in 2023 to 3.5% in 2025.
As a result, monthly mortgage payments have decreased, and a growing number of expats are revisiting the idea of buying, especially those with stable incomes or permanent residence status. In fact, Czech banks have recently reported a surge in mortgage applications, reflecting renewed confidence among both locals and foreigners.
A Tight Housing Market Keeps Pushing Prices Up
While lower interest rates make mortgages more attractive, the other side of the equation—property prices—continues to push upward. Prague’s housing market is experiencing a chronic supply shortage, which keeps prices high and rising.
In 2024, the city issued only about 5,270 new housing permits, which is roughly half the number needed to meet demand. Construction is often delayed by lengthy approval processes, and new housing units are quickly absorbed by the market.
As a result, buyers are not only competing with each other but also with investors who continue to bet on Prague’s long-term growth.
The average price for a new apartment has now reached CZK 167,947 per square meter, and in some fast-growing districts like Prague 3, 7, and 10, annual price increases have ranged from 15% to 25%.
For buyers, this means that while property may not be cheap today, it is likely to become even more expensive in the coming years.
Buying is an Investment in Stability and Value
Beyond cost comparisons and interest rates, buying a home also brings a sense of security that renting often lacks. Renters in Prague are exposed to year-to-year uncertainty—higher rent, landlord decisions, the risk of non-renewed leases, and limited ability to make changes to the property.
For families, professionals, or even digital nomads planning to stay in Prague long term, ownership offers far more stability as mortgage payments are predictable (especially with fixed-rate loans), and owning a property means having the freedom to renovate, sublet, or simply settle without worrying about unexpected changes.
Additionally, real estate in Prague has proven to be a reliable investment. Over the past five years, property prices have increased by around 65%, and most experts expect continued growth, driven by limited supply and strong demand.
What This Means for Expats in 2025
The combination of high rental prices, more affordable mortgages, and rising property values has created a moment of opportunity for expats who are in a position to buy. For many, it no longer makes financial sense to keep renting, especially when mortgage payments are equal to or even lower than the cost of renting a comparable flat.
While the buying process can be more complex—especially for foreigners who are unfamiliar with Czech law or banking requirements—it is also becoming more accessible and you can use our help as we can navigate you through the whole process and take care of practically everything.
In summary, the Prague real estate market in 2025 offers more incentives than ever for expats to transition from renters to homeowners. With falling mortgage rates, strong long-term appreciation, and a rental market that shows no signs of slowing down, buying a home has become not only a practical decision, but often the smarter financial move.
For those who plan to stay in Prague, it may be the right time to stop paying someone else’s mortgage—and start investing in their own.
This article has been written by Maxmilián Rožek
Maxmilián Rožek
Co-founder of CzechAdvisors
We have our own dedicated Podcast for Expats!
Good Mortgage Czechia! is a podcast about the financial system of the Czech Republic specially tailored for expats living in the Czech Republic.
Specifically, we will talk about how to arrange a mortgage in the Czech Republic, what to look out for when buying a property, or how to invest your money properly so that it does not lose value in the long term.
You will be guided through the podcast by Maxmilián Rožek and Štěpán Kubeček, founders of CzechAdvisors, a financial consulting company for expats living in the Czech Republic.
Our website: https://www.czechadvisors.cz/
Starting from September 2024 there will be considerably higher fees for early repayments or refinancing of a mortgages.
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