Prague

The Prague housing market in 2025 is marked by a surge in both property and rental prices, high demand, and persistent supply shortages, especially for affordable housing. Approximately 75–80% of Prague residents own their homes, while around 20–25% rent—a proportion of renters that is gradually rising due to record property prices and high mortgage rates making ownership increasingly inaccessible for many, particularly younger households.

The median price to buy an apartment in Prague at the end of 2024 was about 139,900 CZK per sqm, or roughly 5,670 EUR per sqm using current exchange rates. Newly built apartments are even higher, reaching about 163,000 CZK per sqm (6,600 EUR per sqm). Average rents in early 2025 are around 438 CZK per sqm per month, which is approximately 17.8 EUR per sqm per month.

Publicly owned (municipal) housing plays a small but growing role in Prague. Municipality initiatives plan to add 6,000–8,000 new units over a decade, but currently, municipal housing remains a minor fraction of the market, with Prague’s public housing stock covering only a few percent of total homes. Public housing and social housing are not the same: not all municipal (public) housing is allocated according to social need, and only a subset operates as true social housing—targeted at low-income or vulnerable groups and let at below-market rates. Hence, social housing remains in chronically short supply relative to need.

The housing crisis in Prague is characterized by skyrocketing property and rental prices, intense demand, and severe shortages of affordable housing. Property prices have hit record highs, with new apartments averaging about 6,600 EUR per sqm. Rental prices have also increased significantly, with average monthly rents being approximately 17.8 EUR per sqm. This has made homeownership increasingly unaffordable, particularly for younger households, resulting in a rising proportion of renters. Despite a high rate of homeownership historically, more residents are turning to renting due to accessibility issues. The crisis affects both local residents and international workers, with strong demand fueled by Prague's economic growth and appeal as an international city. The shortage of housing supply is exacerbated by bureaucratic delays and regulatory challenges in new construction projects. Those most affected are low-income and vulnerable groups, who face a chronic shortage of social housing.

Prague’s current city administration tackles affordable and sustainable housing primarily through public-private partnerships and targeted funding programs. The most notable recent initiative is a collaboration with the European Investment Bank (EIB) and Česká spořitelna, supporting the construction of over 700 new energy-efficient rental apartments for key public-sector employees, such as nurses, teachers, and police officers. These units are let below market rates and feature climate adaptation technologies like green roofs and advanced water management, aligning with stringent energy efficiency standards.

Governmental targets include developing 6,000–8,000 municipal units by 2035, though annual construction remains far below the estimated demand of 10,000 new units per year. To address supply shortages and bureaucratic delays, the city expedites approvals for strategic projects and purchases properties for rapid renovation, prioritizing allocation to seniors, people with disabilities, and essential workers.

Recent funding programs leverage EU support: EUR 90 million from the Recovery and Resilience Facility, along with low-interest loans, are earmarked to finance the creation or renovation of at least 800 affordable homes, aimed at low-income and young households. The Prague Development Company, established in 2020, is a key municipal vehicle for driving affordable housing projects on city-owned land, with emphasis on sustainability and social inclusion.

In Prague, cooperative housing plays a minor but potentially growing role in addressing the city's housing challenges. The sector is not yet a significant part of the housing market, with a focus primarily on private ownership and rental properties. Cooperative housing is seen as a more affordable alternative, especially for young families and in areas where private ownership is becoming increasingly unaffordable.

The city of Prague currently does not have a strong policy focus on cooperative housing compared to other forms of affordable housing. However, there is a broader trend in the Czech Republic towards revitalizing cooperative housing as a solution to high property prices and limited affordability. Some developers, like Finep, have been involved in building cooperative housing projects in Prague.

Policy initiatives in Prague are more centered on public-private partnerships, municipal housing, and targeted funding programs, such as collaborations with the European Investment Bank to support affordable rental units for key public sector employees. Cooperative housing could potentially benefit from similar collaborations between municipalities, developers, and communities to increase its presence in the city.