Why Housing in the Czech Republic Is So Expensive and What’s Behind It

Overregulation and Costs

Building in the Czech Republic is not only slow but also costly. Regulations on construction standards are often stricter than in countries like Germany or Austria, which raises costs significantly. While the intention is to promote sustainability and safety, the practical outcome is that each new apartment is far more expensive to deliver. For example, requirements on lighting, acoustics, or fire safety in connection with new technologies such as electric vehicles sometimes exceed what is reasonable, adding significant costs. Add rising material and labor prices, and the final cost per apartment goes up, which eventually means higher rents and sale prices.

Outdated Urban Planning

Another big obstacle is zoning. Prague’s master plan (main document guiding the development of the city), for example, is more than 25 years old. It was supposed to last only about 10 years and no longer reflects the needs of a modern, growing city. Because of outdated and rigid planning rules, there simply is not enough land available where developers are actually allowed to build. This rigidity leaves many potentially useful sites, such as brownfields, underutilized. Experts argue that urban planning should recognize housing construction as a public interest and give municipalities more authority to define areas for development. Without such flexibility, the shortage will persist.

Myths About Empty Apartments and Speculators

You might hear that the housing shortage is caused by investors buying up flats and leaving them empty. The data, however, tells a different story. Most investment apartments are rented out, which actually increases supply on the rental market. Statistics on unoccupied flats are often misleading, since many of these apartments are in fact lived in, just not registered as permanent residences.

Similarly, foreign buyers are sometimes blamed for driving up prices. In reality, only about 20 to 30 percent of apartments are purchased as investments, and most foreign buyers are Slovaks moving to the Czech Republic. The common narrative of ghost apartments causing shortages is more myth than reality.