Czech Republic real estate faces rising prices and rental regulations

The Czech real estate market is facing dual pressures from rising costs and proposed regulatory changes for short-term rentals. According to an analysis by Valuo, the price of older apartments increased by an average of 1% quarter-on-quarter and 10% year-on-year, with an average price of 86,538 CZK per square meter. While growth slowed slightly compared to the first half of the year, prices in major cities like Prague and Brno remain high, with regional cities seeing rapid growth as buyers seek more affordable alternatives.

Simultaneously, the Ministry for Regional Development is preparing an amendment that would grant municipalities the authority to regulate short-term rentals. Proposed measures include limiting the number of guests or restricting rentals to specific tourist seasons. In Prague, officials are considering maximum allowable rental days per year. Some local districts, such as Prague 1, are even exploring stricter requirements, such as mandatory re-certification of properties intended for tourist accommodation to ensure they are not being used for residential purposes.

Industry representatives have expressed concerns regarding these regulations. The Czech Association of Private Landlords and Accommodation Providers warned that limiting rental days could drive honest hosts into the ‘grey zone’ and potentially cause rental prices to spike during peak seasons.