Czechs save for their own housing the longest in Europe. How is this crisis affecting the LGBTQ+ community?

Housing prices in the Czech Republic over the last ten years

Housing prices in the Czech Republic have experienced a significant increase over the last ten years, which is disproportionate to the growth in average incomes of the population. In 2013, the average square metre of a new apartment in Prague was available for around CZK 50,000, while today it is around CZK 104,000. This trend is evident not only in Prague, but also in other cities and towns across the country. The main reasons for the rise in real estate prices are the limited supply of apartments, the complex process of building approvals and the lack of support from the state.

However, economic growth and the growing demand for housing in Prague and other large cities have not only contributed to higher property prices, but also to higher rents, which will be discussed later. This increase is due not only to the growing demand for rental housing, but also to relatively high energy prices, inflation and economic uncertainties.

In 2020 and 2021, house prices stabilised for a short period of time, due to the covida pandemic, which slowed down the housing market. However, from the second half of 2022, prices started to rise sharply again (as a result of the war in Ukraine), leading, among other things, to a general deterioration in housing affordability. As Miroslav Linhart of Deloitte succinctly states, "The affordability of owning a home in the Czech Republic remains poor and does not yet look set to change."

The current situation

Today, the situation on the Czech real estate market is almost critical. In addition to high house prices, Czechs are also faced with expensive mortgages. The Czech National Bank has raised interest rates, which has led to more expensive mortgages, which are currently the fifth highest in Europe. Mortgage rates in the Czech Republic are around 6%, making it impossible for many people to buy their own home. As a result, many Czechs are turning to rented housing or looking for alternative solutions such as co-housing. In addition to high mortgage rates, the slow approval and construction process for new housing is also problematic. In the Czech Republic, only 2.8 new dwellings per 1,000 inhabitants have been completed, which is below the European average, and this further increases the pressure on prices.

According to the latest statistics, Prague ranks second among European cities in terms of housing costs, just behind Amsterdam. While in Amsterdam one needs on average 15.1 annual salaries to buy a home, in Prague it is 13.5 annual salaries. By comparison, in Denmark and Norway, it takes less than five annual salaries to buy a home. The average price of new flats in Prague is CZK 104,000 per square metre, an increase of more than nine per cent year-on-year. Higher prices in Europe are only in a few countries, such as Austria or Israel, where prices per square metre exceed CZK 130,000.

The current housing situation also has wider economic implications. High housing costs affect the availability of labour, which is a particular problem for large cities that need to attract and retain key workers. Prague, for example, plans to build several thousand rent-controlled public rental apartments to alleviate this problem. A further complication is the ever-rising rents, which in Prague have increased year-on-year to CZK 402 per square metre, putting the city 24th out of nearly 60 European cities surveyed, and making housing even less affordable for the middle class.

Impact on the LGBTQ+ community

Housing unaffordability obviously has a significant impact on all residents, but some groups are particularly vulnerable. One of these groups is the LGBTQ+ community. Indeed, some studies suggest that LGBTQ+ people may face discrimination both when seeking housing and when negotiating the terms of their rent or mortgage.

For example, in some countries, including the Czech Republic, LGBTQ+ individuals and couples face higher housing costs because they are often forced to seek housing in larger cities where there is a greater level of acceptance and tolerance. These areas are also more expensive, making housing less affordable. Research by the European Fundamental Rights Agency (FRA) in 2020 also showed that LGBTQ+ people are more likely to face discrimination and hostility from neighbours, which can lead to difficulties in finding long-term housing. The FRA reports that around 6% of LGBTQ+ respondents in Europe have experienced discrimination when looking for housing in the last 12 months, showing that discrimination and stigma can play a role in housing affordability.

International studies, particularly from the UK and the US, provide further worrying results. According to Stonewall, up to 1 in 10 LGBTQ+ people in the UK have faced discrimination when looking for a rental. Similarly, a study by the Urban Institute in the US found that LGBTQ+ couples were less likely to get a tenancy compared to heterosexual couples. These studies suggest that discriminatory practices against LGBTQ+ people are not uncommon.

In addition, LGBTQ+ individuals and couples are more likely to live alone or without family support, which can make it more difficult for them to access intergenerational financial assistance, which is crucial for many young people in the Czech Republic to obtain their own housing. According to sociologist Martin Lux of the Academy of Sciences, intergenerational assistance is one of the factors that enables some young Czechs to acquire their own housing. However, LGBTQ+ people often do not have this support due to strained family relationships or other social barriers.

Unfortunately, the LGBTQ+ community is also uncomfortably overrepresented among the homeless, but this is more of a concern abroad
Photo: Adobe Stock

Beyond these difficulties, LGBTQ+ people are also over-represented among the homeless population, particularly young LGBTQ+ individuals. In the US, for example, LGBTQ+ youth make up 20-40% of all homeless youth, despite only making up about 5-10% of the total population. This data points to deeper systemic problems in access to housing for the LGBTQ+ community, often caused by discrimination, stigma and lack of support from families and society.

Possible solutions and future prospects

Improving the housing market situation in the Czech Republic requires a comprehensive approach. One solution is to increase the number of affordable housing units by simplifying building regulations and permits. Faster construction could also be supported by a new building law, but this has so far encountered problems with digitalisation.

Another important change could be the provision of more affordable mortgages and support for development projects aimed at building affordable housing. Private developers should be incentivised to build more affordable housing, for example through tax breaks or subsidy programmes.

In the long term, however, it is crucial to change the approach to housing policy and develop rental housing as a full-fledged alternative to owner-occupied housing. This model could alleviate pressure on the property market and make housing more affordable for a wider range of people, including vulnerable groups such as the LGBTQ+ community.

The housing market situation in the Czech Republic is generally complex and requires targeted and systematic interventions by both the state and the private sector. If effective measures are taken, housing affordability in the Czech Republic can improve. However, without these fundamental changes, housing will remain an elusive goal for many people, including the LGBTQ+ community.