Mortgages Are Rising Again. Why the Entire Market Is Breaking in Prague
- Jan Halik
- Jan 23
- 3 min read
The Czech mortgage market has seen a strong comeback. In 2025, the volume of newly granted loans reached levels reminiscent of the strongest years before the pandemic. At first glance, it might seem that the market has “returned to normal.”
But the reality is more complex. While mortgages are growing again, housing affordability continues to worsen — especially in Prague. Not because people lack interest, but because every new purchase now requires significantly higher capital, higher incomes, and much greater financial discipline.
🔢 Volumes Are Rising. The Number of Buyers Is Not
At first sight, the numbers look optimistic: hundreds of billions of crowns in new mortgages and year-on-year growth in the tens of percent. A closer look, however, reveals that the market is not being driven by more buyers, but by higher average mortgage amounts.
Just a few years ago, the typical mortgage was around three million CZK. Today, the average has moved beyond four million. Prices in Prague are the highest.
The result? A similar number of buyers as before, but significantly higher household debt.
🏙️ Housing in Prague as the Main Driver of Price Growth
The key difference compared to the past lies in the geography of demand. The market is once again concentrating in major cities — with Prague playing the leading role.
Housing supply remains limited, while demand has returned after weaker years. This combination pushes prices up faster than in regional markets. And as prices rise, so does the size of the required mortgage.
In the past, it was common to “escape for affordability” outside the city. Today, that strategy works less and less. Even the outer districts of Prague and its wider surroundings have become significantly more expensive.
🏗️ Building Today? Only for Very Strong Households
Another major shift is the change in the structure of demand. Due to high construction costs, building a family house has become accessible only to a small group of very affluent households.
Most buyers therefore focus on:
completed properties
good technical and energy standards
locations with long-term value
These properties — typically Prague apartments — now generate the highest mortgages and exert the greatest upward pressure on prices.
⚠️ Affordability Is Quietly Reaching Its Limits
The market has not hit a wall yet. Instead, it is gradually sorting itself out.
Some households:
postpone their purchase
lower their expectations
or leave the market entirely
Not because they no longer want to own a home, but because the combination of property prices, loan size, and monthly repayments has exceeded their financial comfort zone.
Every additional million in borrowing now means several thousand crowns more in monthly repayments. And with current prices in Prague, those millions add up quickly.
🔮 What Comes Next?
In the short term, no major reversal is expected. Supply remains limited, demand holds up, and prices still have room to grow. The mortgage market is therefore likely to continue expanding in 2026 — but no longer across the board for everyone.
A more realistic scenario is gradual cooling:
pressure on household incomes
higher requirements for own capital
potential tightening of regulation
All of this would slow the market naturally, without dramatic declines.
🧭 Summary for Prague
Today’s Prague market stands on a paradox:
mortgages are growing
mortgage volumes rank among the strongest in history
yet housing is affordable for a shrinking group of people
Those with stable incomes, sufficient own resources, and a long-term horizon will still find a way in. For everyone else, Prague is becoming an increasingly demanding challenge — not only financially, but strategically as well.
Jan Halík
Real Estate Agent
📞 +420 603 377 791
RE/MAX Atrium
Podolská 811/138
140 00 Praha 4 – Podolí
