HOUSING CRISIS IN PRAGUE: THE DARK SIDE OF ECONOMIC PROSPERITY

In recent years, Prague has maintained a strong reputation as an economically attractive capital, but this advantage is rapidly fading due to a growing housing crisis. Despite average incomes being more than 25% higher than the national average, many residents struggle to cover unexpected expenses and daily living costs. According to the Czech Statistical Office (ČSÚ), around 14% of Prague households are unable to afford an unexpected expense of CZK 15,600 (approximately €625), while more than a third report difficulties making ends meet each month. This highlights how higher salaries alone are not enough to guarantee a decent standard of living.

A widening gap between income and housing costs
Prague’s economic strength is evident in the numbers: in 2024, the average gross monthly salary exceeded CZK 57,000, and the net annual income per household member reached about CZK 350,000. However, this apparent prosperity is quickly eroded by high housing costs. The average monthly rent in Prague now reaches approximately CZK 31,500, representing over a third of total housing expenses and nearly 19% of a household’s net income. Additional costs such as heating and hot water make up another 14.6% of the housing budget, well above the national average of 10.1%. The result is significant financial stress affecting various segments of the population.

Young people leaving the capital: the start of “deurbanization”
One of the most visible effects of this financial pressure is the exodus of young people from central Prague. Increasingly, residents especially those aged 20 to 35 are moving to suburbs or peripheral areas in search of more affordable housing. According to an analysis by Česká spořitelna cited by iDnes.cz, this trend represents a clear sign of “deurbanization”: the city centre is losing its younger generations, who continue to work in the city but choose to live elsewhere to cut costs. This migration is reshaping regional demographics, particularly in the Central Bohemian Region, which is growing at a rate equal to the combined increase of all other Czech regions excluding Prague.

A housing market that remains out of reach
Prague’s real estate market is showing signs of activity but not of accessibility. In early 2025, apartment sales rose by 60% compared to the previous year, indicating high demand. However, prices continue to climb: a new apartment now costs an average of CZK 168,000 per square meter. Families are particularly affected, struggling to find suitable housing. About 65% of units on the market are one- or two-room apartments, reflecting the growth in one- and two-person households. As a result, more and more families with children are choosing to leave the city, exacerbating the trend of suburban migration.

Long-term social and economic consequences
The impacts of this crisis extend far beyond the economic realm. Rising crime rates, difficulties in accessing quality education, and increasing territorial inequality are reducing Prague’s overall appeal. The city recently received a low score in a national prosperity index despite its economic strengths. While Prague remains a cultural and employment hub, it is at risk of becoming increasingly unlivable for broad segments of its population. Local authorities now face the difficult challenge of maintaining the city’s economic appeal without sacrificing livability. Inclusive urban planning policies, investments in affordable housing, and a rethinking of residential models could be key to reversing the trend.

Prague at an urban crossroads
The current housing crisis represents a major test for Prague’s future. Without targeted and structural intervention, the city risks becoming a space reserved only for those who can afford it, pushing out young people, families, and essential workers. The Czech capital has the resources to meet this challenge, but a clear and bold vision is required. Only by taking decisive action can Prague once again become not only a wealthy city, but a fair and livable one.