Prague, 6th of May 2020 – The release of Airbnb apartments in Prague into the classic rental market due to the state of emergency continued in April. 950 new advertisements appeared during the month in Prague 1 alone, i.e. almost four times the normal long-term average. Moreover, the rents for the smallest apartments fell to 440 CZK/m2, which equalised them with prices in other districts in the metropolis. The same situation reigns in Brno, but on the contrary the rental market in other regional and smaller cities was not affected by the state of emergency.
In the past month, Prague 1 recorded an increase in the number of new advertisements to 950, i.e. 150 offers more than in March. “However, the long-term average in this locality fluctuates around 270 advertisements per month. The trend continues of the release of Airbnb apartments in the centre of the metropolis into the classic rental market, caused by the state of emergency in effect in the Czech Republic, “explains data analyst Bohuslav Koukal, who deals with the prediction and analysis of the rental and real estate markets in Adastra.
On the contrary, the apartment rental market in Prague 2 and 3 already reached its peak in March, and in recent weeks the number of new apartments on offer has begun to fall. Other parts of Prague have also not recorded any statistically significant changes.
The drop in the prices of the smallest apartments in the centre of the metropolis also continued in April. Rents fluctuated around 440 CZK/m2, i.e. 70 CKZ/m2 less than two months ago. “The price of renting a studio in the centre therefore fell to as little 13,000 CZK per month, which equalised them with prices in other parts of the city. Rents also decreased slightly in other parts of Prague; there was a drop of 10% from the prices at the start of the year, “says Bohuslav Koukal.
On the contrary, the state of emergency had only a very slight effect on the rental market in regional and smaller cities. Only in Brno did it have a more significant impact. “Here, too, we see an increase in the number of new apartments on offer in April of almost a third compared to the situation in March. We assume that it is a similar situation to Prague, i.e. these are released Airbnb apartments or apartments which were previously rented for long periods, mainly to foreign students and workers, “Ivo Mareček, Adastra's Marketing Director, comments on the situation. It takes approximately one month for the Brno market to respond to what happens in the Prague market, which brought about the overall lower rents that owners in Brno are charging for their properties.
Prediction of the further development of the rental market
Analyst Bohuslav Koukal also expects a decrease in the coming months, where Airbnb apartments will continue to be released for both rent and sale. However, apart from the centre of Prague, the fall in long-term prices should not exceed 10-15%. The fall in prices can also be influenced by other factors, such as for example an increase in unemployment or the number of persons in distraint proceedings and insolvency. “Price development will obviously be affected by the political situation. In the event of further entries by the state into the legal relationship between property owner and tenant, we may see a more drastic cooling of prices, for example due to rent caps. Moreover, if there is great pressure for low rents, some lessors may prefer to leave their apartments vacant instead, or exit the rental market completely and offer their properties for sale. Such a scenario, on the contrary, would lead to a decrease in the number of apartments available for rent, and thereby once again to a potential increase in rents,” adds Bohuslav Koukal.