Living with parents, so called “mamahotels”, they went out of fashion until last year. This is indicated by newly published Eurostat data. “Last year, the share of young people in the Czech Republic who live with their parents fell to the lowest level in at least ten years. In 2021, 45.6 percent of Czechs between the ages of 18 and 34 lived with their parents. This is 8 percent less than in 2013,” says the survey.
|Source: EU-SILK survey, published August 2022|
So-called “mama hotels” experienced the peak of their popularity in 2013. “At that time, 53.6 percent of young Czechs lived with their parents. However, households were licking their wounds from the global financial crisis and its effects, which were clearly visible in the Czech Republic for about four years until 2013. The years of prosperity from 2014 to 2019 then brought a gradual decline in the popularity of living with parents,” explains Lukáš Kovanda, chief economist Trinity Bank.
The pandemic also contributed to the independence of young people, when rent prices fell. “For example, in some places in Prague, rents fell by tens of percent during covid, due to the outflow of tourists and the decrease in short-term rentals through platforms such as AirBnb,” explains Lukáš Kovanda.
However, the situation is changing drastically. Currently, due to inflation, the return of tourists, but also the demand of Ukrainian refugees, both rental prices and the monthly fee for student dormitories are rising. According to Kovanda, “Mamahotels” will come back into fashion.
You can save up to a million by living with your parents
Living with parents until the age of 34 may not suit all young people, but it can save quite a lot of money. One illustrative example for all.
According to Kovanda, the average rent without fees in Prague last year was about 24,000 crowns. “Young people tend to choose smaller and cheaper apartments, so the average rent in their apartments was cheaper. However, fees must be added. This means that the full price of a student apartment last year averaged around 16,000 crowns. As a rule, more people live in student apartments, so the costs per person last year were around 5,300 crowns per month?
“Young people who have already finished their studies but have not yet started a family and live with several people in a smaller Prague apartment faced similar costs. Those who choose the ‘mamahotel’ instead of this option will save at least around 750,000 to 1,000,000 crowns and up to one million crowns only on housing costs during ten years between the ages of 25 and 35. Of course, on the assumption that young people do not have to contribute even a penny to their parents for housing, which is a fairly common case,” Kovanda calculates.
Savings can make your own home more affordable. But he wants to save during his stay at the “mamahotel” and not spend unnecessarily.
Will startup cities become a reality?
However, how to solve the housing situation in the Czech Republic? Is it up to young people to figure things out on their own or with the help of their parents? And should the state finally do something about it?
Or will the creative idea of ”Startup cities for young people”, which Raiffeisen stavební spořitelna came up with three years ago, become a reality?
In the summer of 2019, i.e. before the pandemic, housing for young families with children was built on Karlínské náměstí in Prague. They included lighting, armchairs, comfortable beds, electronics, flowers, toys for children and a pet.
The youth start-up city attracted a lot of public attention and caused a huge number of smiles from passers-by. It had one flaw – the dwelling had no solid walls or windows. The starting city was a tent city. Living in tents is pleasant, but when summer ends and autumn and winter begin, heating such a tent would not be cheap at all today.
Housing for young people even more unaffordable
However, times are changing dramatically – apartment prices are rising for a long time, mortgages are also becoming more expensive, and without savings, many people will not be able to afford them at all. Inflation is rising dramatically and rent is also becoming more expensive. The growing interest in rental housing pushes prices up and also makes energy extremely expensive.
The age structure of people buying a new apartment is also starting to change. Compared to previous years, older people are buying apartments. While in 2015 the average age of buyers was 39 years, in 2020 it was 43.7 years and this year it is 45.4. This follows from the sales statistics of the Central Group company, which focuses on the construction and sale of new apartments in Prague.
“We consider the main reasons for the increase in the average age of our clients to be that people are putting their savings into real estate in an attempt to protect money from inflation. And, of course, older people tend to have savings. Younger people were also more affected by more expensive and less affordable mortgages. For people under the age of 36, milder CNB limits do apply, but the higher interest rates are too high for them, moreover, they are combined with a general overwhelming increase in prices. The long-term decline in younger clients is of course also due to the sharp rise in apartment prices in recent years,” says Michaela Tomášková, executive director of Central Group.
Housing for young people is thus even more unaffordable. The worst situation is in Prague. The latest CG Index published this June also points to a significant reduction in the availability of housing in Prague.
“A resident of Prague would earn 17.3 years on an average new apartment, if they had no other expenses. Compared to last year, it is almost two and a half years longer. In the long term, apartment prices are growing significantly faster than wages. “Since the beginning of 2015, apartment prices have increased by 136%, wages by only 41%,” concludes Tomášková.