Living on a few square meters or the reality of life in some of the world's metropolises. Is the Czech Republic heading towards it?
In well-known world metropolises such as Hong Kong or Los Angeles, real estate prices have climbed to such heights that even for people with average salaries it is literally impossible to buy a property and it is slowly becoming impossible to find even normal rental housing.
On a few square meters in Hong Kong
If you think your studio apartment is small and uncomfortable, you should remember that there are people in the world who have a far worse fate. Hundreds of thousands of people in Hong Kong live in rooms that are often only 2x2 metres in size.
So they have to sleep on beds that would be too short even for small children, and some of them are glad to have a bed at all. They have shelves stacked up to the ceiling on the walls to maximize storage space, and some of these rooms even have the whole family crowded in.
If you thought that at least the price of these "living tombs" would be pleasant, it is not. Due to the high price of property in Hong Kong and its constant rise, the average rent in these "pens" is around 5,500 crowns.
Photo: Archiv Society for Community Organisation"Living boxes" in Los Angeles
The housing situation in the American city of Los Angeles is also quite unbearable. It is true that many people long to live in this angelic city. In addition, one of the most expensive neighbourhoods in the world is nearby - Bel Air, where the world's richest people have huge mansions. Unfortunately, this fact is also reflected in the price of real estate there.
Many young people have no choice but to live in 'boxes' - it is not only in Los Angeles that rented houses are being built with 'boxes' inside. These are the cheapest housing you can find in attractive locations in the city, and it must be said that when we talk about the cheapest housing, the price is around 30 thousand crowns a month.
This is an interesting concept of housing, for which the term co-living is used in America. One of the boxes is currently occupied by David Drobik, a Czech, specifically in the Venice Beach area of the city. His box is located in one of four family houses, where 100 people live together. Each person has their own sleeping box, where they have only personal belongings, a mattress and bedding, the rest are common areas that can be used by all the tenants.
Yes, somewhat better housing compared to the cubicles in Hong Kong, but still, for the equivalent of 30,000 crowns a month, it's not a hit. David showed his living arrangements in an interesting video by Michal Sopor. It can be seen on YouTube:
Rising real estate prices in the Czech Republic
The Czech Republic has not escaped the big increase in property prices. In larger cities, property prices (according to data from January 2019 and January 2020) increased by around 11.88%. The highest average price (real estate offered by real estate agencies) per square meter was in Prague, around CZK 97,000 (in 2019 it was CZK 84,000). Cheaper housing could be found mainly in the outskirts of the capital. For example, in Prague West and Prague East, the price per square meter was below 80 thousand crowns. According to the CNB's estimate, the real estate market should start to see a gradual decline in prices, but certainly not any rapid decrease.
Tomáš Somogyi, an analyst at Conseq, also expects a drop in property prices, saying that the Czech property market is currently at a price peak. Unfortunately, he also confirms that it will not be a dramatic decline. The final fall depends on a number of factors such as the future development of the economy, the situation on the labour market, the dynamics of the population's income and the confidence of the Czechs in the economy.
"In the coming years, due to the amendment to the Building Act and the frontloading of developers and finished projects, the supply of available apartments will increase. This will be compounded by the economic slowdown due to Brexit, global threats and a weaker German economy. This will worsen the situation on the consumer side as unemployment will rise, it will be harder to find work, real wages will not grow much and the debt burden will increase," says Somogyi. The current crisis caused by the coronavirus pandemic will also have a significant impact on property prices.
Shift to rental housing
In Prague, we do not have to worry about similar housing, which is a reality in Hong Kong or Los Angeles, but it is still a big problem to get a property of our own. Although the Czechs as a nation are not very fond of rental housing and the tradition of ownership is strongly rooted here, rental housing is clearly unavoidable for many.
"Apartment prices are rising faster than rental prices. It can be assumed that rental prices will catch up, but there is not much room for higher rents given their current level. This could ultimately cause a shift in preferences from owner-occupied housing to rental housing. This is particularly expected among the younger part of the population, who are likely to prefer more flexible rental housing over mortgages. This is even at the cost of never owning any property," adds Tomáš Somogyi.
