Prague is Europe's second least affordable city for housing: a new flat costs almost 17 annual salaries

In brief

• According to the Deloitte index 2026, a new 70 sq m flat in Prague costs almost 17 average annual salaries, up from about 15 a year earlier.
• Prague ranks second for housing unaffordability among the cities surveyed, after Vlora in Albania (21.3).
• Brno and Ostrava are also in the top ten least affordable. The average new-build price in Czechia is second only to Luxembourg.
• The average asking price for Prague new-builds in Q2 2026 was about CZK 182,700 per sq m.
• On rent, Prague ranks 18th: about CZK 470 per sq m per month.
• Banks usually lend up to 80% of value, and up to 90% to buyers under 36 buying their own home.

17 annual salaries: what the index showed

The Deloitte Property Index compares housing prices and incomes across European cities every year. The key measure is how many average gross annual salaries a new 70 sq m flat costs. In 2026 for Prague it is almost 17 salaries. A year earlier it was about 15, meaning prices rose faster than incomes.

It is important to understand what this measure means. It is not the time it takes to save for a flat, nor the length of a mortgage. It is a price-to-income ratio: how many years a person would have to hand over their entire gross earnings to pay for the flat. In practice only part of income goes on housing, so the real path to buying is much longer.

Czechia also stands out on absolute price. The average new-build price in the country, about CZK 132,000 per sq m, is second only to Luxembourg in the study. For a country where wages are lower than in Western Europe, this explains the high unaffordability figure.

The problem is not Prague's alone. Three Czech cities made the study's ten least affordable: Prague, Brno and Ostrava. Next to them is Kosice in Slovakia, at about 15 salaries. This shows that in Central Europe new-home prices have run far ahead of local incomes in recent years, and it is not a single capital-city market. For comparison, in most Western European cities, where wages are higher, the same measure is noticeably lower, even though prices per metre are often higher.

What this means for you. If you move to Prague on a local salary, buying a flat in the first years will be hard. With foreign income or capital the calculation is different, but prices are already at the level of expensive European capitals.

Why has housing in Prague become so expensive?

Deloitte's experts name several causes. The main one is the gap between prices and household incomes. Demand remains strong, while building is slow: Prague has long permitting processes, and fewer new flats come onto the market than a growing city needs. Financing remains relatively expensive, which does not cool prices but merely shuts out some buyers.

More on this topic: What a Family Costs in Citizenship Programmes and A Second Passport and Banks.

According to Deloitte, without a substantial increase in supply no noticeable improvement should be expected. The pressure is already spreading beyond Prague: Brno and Ostrava are in the ten least affordable cities, and buying is getting harder for young and first-time buyers.

For comparison, Athens stands at 16 salaries, almost the same as Prague, while Turin is at just 4.7. The difference reflects not only prices but wage levels: in some cities expensive housing goes with high incomes, in others it does not. We wrote about overall price growth in Europe in the news on euro area inflation.

What this means for you. The structural causes, slow construction and strong demand, will not disappear quickly. There is little reason to count on a noticeable fall in Prague prices in the coming years.

Renting in Prague: 18th place and CZK 32,900 for 70 sq m

On rent Prague looks markedly calmer. In the ranking of cities by rental cost it is 18th: on average about CZK 470 per sq m per month. For a 70 sq m flat that is roughly CZK 32,900 a month. The gap between its position on buying and on renting shows that buying in Prague is expensive relative to what it costs to rent.

For someone moving, the practical conclusion follows: in the first years renting in Prague is better value than buying on credit. An 80% mortgage requires a down payment of about CZK 2.56 million for a typical flat, and loan payments at current rates will be noticeably higher than rent for the same space.

What this means for you. If you are just moving to Czechia, start by renting. Buying makes sense to consider once the neighbourhood, job and time horizon in the country are clear.

How to rent in Prague: deposit, contract, timing

Since renting is better value than buying in the first years, it helps to know how it works. A rental contract in Prague is usually signed for a year with an option to extend. Under the Czech civil code the deposit may not exceed three months' rent; most often one or two months are asked. If you search through an agency, its fee is often about one month's rent.

For residence purposes, the contract must allow you to register the address, and the owner must confirm the right to let the property. Sometimes the owner's signature on a separate confirmation of accommodation is needed for an application, and this is worth discussing before signing. Utilities in Prague are usually paid on top of rent, and energy has become noticeably more expensive.

What this means for you. When moving to Prague, budget for the deposit, the agency fee and the first month's rent: for a 70 sq m flat that can be over CZK 100,000 at once.

3 factors that will drive prices next

1. Construction. The index's main conclusion is that affordability will not improve without more supply. If Prague manages to speed up building permits, price pressure will ease, but the effect will take years.
2. Mortgage rates. Financing remains expensive. Lower rates would bring some buyers back to the market but could push prices up if no new flats are added.
3. Demand from newcomers. Prague remains a magnet for specialists and students. A growing number of foreigners supports demand for both renting and buying.

For someone planning to live in Czechia for several years, the practical conclusion is the same: prices are unlikely to return to past levels, so the decision to buy should be based on your own plans and income, not on waiting for the market to fall. Brno and Ostrava are cheaper in absolute terms, but affordability there is also worse than in most European cities.

What this means for you. If you are postponing a purchase in Prague in the hope of lower prices, work out how much you will pay in rent over those years. Sometimes waiting costs more.

Checking mortgage access for a foreigner

The Czech National Bank limits the size of a mortgage relative to the property value. As a rule banks lend up to 80% of value, and up to 90% to buyers under 36 buying their own home. For a flat of about CZK 12.8 million this means own funds of about CZK 2.56 million at 80% and about CZK 1.28 million at 90%.

Getting a mortgage in Czechia is harder for a foreigner than for a citizen. Banks usually want to see a long-term or permanent residence permit, income in Czechia and a credit history in the country. EU citizens pass the checks more easily. That is why many foreigners either buy with their own funds or first live and work in the country for several years.

What this means for you. For a foreigner a mortgage in Czechia is realistic but requires a history of living in the country. Buying with own funds is simpler, but in Prague it is a large sum.

Moving to Czechia: housing and residence in one plan

For foreigners, housing in Czechia is directly linked to residence. When applying for long-term residence you must prove accommodation, and on renewal you must keep your address up to date and report changes. A rental agreement works just as well as ownership. In 2029 the filing procedure moves to an online system; we wrote about the new law in the news on Czechia's foreigners act.

Foreigners can buy homes in Czechia without a separate permit, but a purchase does not give residence: Czechia has no residence-by-property programme. The grounds for living remain work, business, study or family. If you are opening a business, how we register companies in Czechia is described on the page on a company in Czechia.

If more affordable property matters to you, compare Czechia with its neighbours. Poland has different prices and its own rules for foreign workers; on the 2027 minimum wage, see the news on the minimum wage in Poland. The programme catalogue is in the residence section.

What this means for you. In Czechia a home does not give status, and status does not require buying. First the basis for living, then the decision to rent or buy.

What it means for an investor

A high price with moderate rent means low rental yield. If a flat costs about CZK 12.8 million and rents for about CZK 32,900 a month, the gross yield before taxes and costs is about 3% a year. After taxes, management and vacancies it will be lower. This is our calculation from the average figures above, not an assessment of a specific property.

So the investment logic in Prague rests more on price growth than on rent. Growth in recent years has been strong, but the index shows that housing is already at the limit of affordability for local buyers, and further growth depends on supply and rates. How the logic of buying homes abroad is changing we wrote about in the news on purchases for residence. Property selections in different countries are in the real estate section.

What this means for you. Prague remains a reliable but expensive market with modest rental yield. For investing for income there are cities and countries with a better price-to-rent ratio.

What to do if you are planning housing in Czechia

How this article was prepared

The article is based on the results of the Deloitte Property Index 2026 as reported by the Czech press on 21-22 October 2026, including the ratio of flat prices to salaries across European cities, average prices and rents. The average asking price for Prague new-builds comes from Deloitte's separate development index for Q2 2026. Mortgage limits follow Czech National Bank rules. The down payment, 70 sq m rent and yield calculations are based on the average figures cited and are estimates. This article does not replace advice on your own situation.