Prague, Czech Republic – Countries in Central and Eastern Europe have seen their housing and real estate prices skyrocket over the past year.
According to Eurostat data, house prices increased by 4.2% annually in the fourth quarter of 2018 in both the EU and the Eurozone, as defined by the House Price Index – which measures the prices changes of all types of residential properties, both newly built and existing, bought by households throughout Europe.
Czech Republic records third highest house prices hike in 12 months
The largest hikes were recorded in Slovenia (18.2%) and Latvia (11.8%) followed by the Czech Republic, which completes the podium with an increase of 9.9% in one year, the third highest among European Union member states.
Although Prague is facing a particularly stark housing crisis, the Czech Republic as a whole has been found to be the most expensive in Europe for two years in a row, as Expats.cz reported, citing a Deloitte Property Study – which found that the average Czech employee will have to work nearly 12 years to earn enough money to buy a house (compared, for instance, to 5 years in Germany and less than 10 years in the U.K.).
The Czech Republic’s housing crisis stems from a wide range of factors, of which the stranglehold of Airbnb rentals is only one aspect, and is primarily led by dramatic housing shortages and lack of available, affordable houses and apartments on the real-estate market.
Strong increases in housing prices in the rest of Central Europe
Luxembourg, the Netherlands and Portugal also saw one of the most significant increases of housing prices last year (9.3%).
Other Central European countries have seen housing prices skyrocket during the past year as well, including Hungary (+8.9%) – which has experienced a significant housing bubble in recent years as prices surged by more than 50% from 2008 to 2017 – but also Poland (+7.6% year-on-year) and Slovakia (+6.8%).
Italy was the only EU country where house prices dropped (-0.6%) over the past 12 months. Half a dozen EU countries also saw the house prices decrease compared to the previous quarter, including France, the U.K., Belgium, Denmark and Sweden.