Good investment, but expensive to rent. The Olomouc housing market has its own specifics

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Starter apartments, new development projects, but also affordable housing in city apartments. Students, but also investors, play an important role in the local market. The Olomouc Report provides an overview of the factors you will encounter when looking for an apartment in Olomouc.

Where and for how much? These questions must be addressed by everyone who is looking for housing in Olomouc. Offers vary in price based on many factors such as location. “Many people look for the center itself, Lazce or Nové Sady are popular. People often return to locations they already know and have acquaintances there“, real estate broker Karel Pazdera told the Olomoucky Report.

In 2023, rent prices in the entire republic and in Olomouc increased slightly compared to the previous year. According to the Rent index, which is evaluated annually by Deloitte, the average monthly rent for an apartment in Olomouc is 256 crowns per m2. People in Olomouc pay an average of 12,500 crowns to rent a 2+1 apartment, and a one-room apartment costs roughly 10,000 crowns. A 3+1 apartment will cost an average of 15,000 crowns. Those interested in rental housing are most often looking for 3+kk and 3+1 apartments. Conversely, investors are most interested in 2+kk and 2+1 apartments. Apartments in the very center reach the highest prices. “The number of applicants for individual apartments is individual. There are always more inspections of apartments before renovation. Usually 10 to 15 applicants apply for one apartment. There are always more inspections of apartments before renovation,” stated Pazdera.

1+1 1+kk 2+1 2+kk 3+1 3+kk
Prague 14.609 14.179 20.303 20.307 24,837 28,831
Brno 11,825 11,878 16,436 16.075 18,761 22.301
Ostrava 7750 7960 10.271 11.306 12.458 18,593
Pilsen 9514 8903 12.084 12,642 14,958 17.097
Olomouc 10.199 10.471 12,494 13,669 14.805 16,829
Rental housing prices in large cities for the 4th quarter of 2023 (in CZK). source: UlovDomov.cz

The Czech Republic is the second least affordable country in Europe for buying your own home. Even though real estate prices have fallen, it is often more profitable to rent an apartment. “Housing is more affordable than two years ago. Real estate is down 15-20% from its peak in 2021. However, mortgages are less accessible, so in reality they are not available at all for the common man. For the general population, who are looking for real estate for their own housing, the conditions are still difficult. Getting a mortgage at today’s rates and conditions is not easy, despite the reduced real estate prices,” Petr Korytar, director of the Hanáck real estate agency, which has been operating in the region since 1992, told Olomoucky Report.

City apartments are getting more expensive this year

The city of Olomouc itself also offers the possibility to rent an apartment within the city apartments. It owns 1,520 apartments. Of these, 557 are intended for seniors, 68 are barrier-free and 26 are social apartments. The rest falls under the regular housing fund, from which about 40 apartments are released every year.

This spring, there will be a planned increase in the price of city apartments. The last time prices were raised was in 2019. Tenants can count on a 20% price increase this year, and 10% in the case of subsidized apartments. “I think that the planned increase in the price of apartments will not affect the demand. We are still at less than 50% of the market rent. We think that everyone who does not own their own property should consider the option of a city apartment“, Deputy Mayor Kateřina Dobrozemská (ProPir) commented on the situation for the Olomoucky Report.

There is also a new point of contact for people who need advice about payment or tenants’ rights and responsibilities. Newly, applications for social and starter apartments for needy and young families will also be collected here. Anyone who meets the conditions will be entitled to a starter apartment. “If we had more city apartments, we would rent them out. Last year, we constantly received new applications, and at the same time, some names were repeated. With the creation of a contact point for housing, we will be able to submit more detailed documents to the Housing Commission,” explained Dobrozemská.

Private investors more often give preference to certain applicants or prefer to leave the apartment empty. The city is considering mutual cooperation in the future. “In time, we will look for a way of guarantees for private owners so that they are willing to rent apartments to tenants that we recommend and to create some kind of multilateral cooperation“, added Dobrozemská.

A city full of students

It is not for nothing that Olomouc is called the student city. Almost 23,000 students study at Palacký University, which is a really large number for a city like Olomouc, which has over 100,000 inhabitants. More than a third of students who receive an accommodation scholarship have to commute to Olomouc or often look for accommodation here. “The greatest interest comes from students especially in the summer and throughout the fall. Most often, they look for a location near the university,” stated Pazdera for the Olomouc Report.

It is this group that has a fundamental influence on the housing market in Olomouc. “The Olomouc housing market has been fundamentally influenced by students for many years, and it will not be any different in the future. You will not find such a ratio of students to the total number of inhabitants in any other city in the Czech Republic. At a time when almost a quarter of the population is made up of university students and employees, they are the group that fundamentally drives the rental market,” Korytar told the Olomouc Report.

Many students look for a rental in Olomouc during their studies. “I was looking for an apartment online. In terms of price, I wanted to fit within 10,000 per month. I finally found an apartment in Povla with the help of a real estate agent. The deposit was two rents. I’ve been in the apartment for three years now,” student Emma described for the Olomouc Report.

Not every student gets into the dorms

There are multiple options for students. Dorms are a frequent and sought-after option, for which there is a lot of interest and space is limited. “I chose the dormitory because it seemed easier than looking for an apartment. The process was simple. All I had to do was not miss the application deadline and I had a place to live. In terms of price, it comes to 2,800 crowns per month, so it’s ideal for me,” student Tereza told the Olomoucky Report.

Students represent a large and at the same time advantageous clientele, which is often targeted by investors themselves. “I have often come across the fact that people who do not live in Olomouc and have no relation to it buy an apartment here as an investment, which they then rent out to students, because they know that their money will be well valued this way“, said Dobrozemská. Her words are also confirmed by Korytar: “Students also influence secondary purchasing markets, as it is a simple and profitable business for investors. Students need housing and there is a constant interest in apartments from their side.”

It is this group that is able to put together higher amounts than, for example, a family with children. They often choose the option of a shared room, which is simply worthwhile for investors. “Students are less demanding on space than a family with children who cannot share a room. Students affect our housing market, which is something we cannot control or reduce as a city,” adds Dobrozemská for Olomoucky Report. “It’s all about people. Some owners have bad experiences with students, when they had to solve various problems, and simply do not want to accommodate students anymore,” comments Pazdera.

Development projects revive the market

In 2022, the most apartments were completed in the region in the last 20 years. According to data from the Czech Statistical Office (ČSÚ), 1,697 apartments were completed in the Olomouc region and 961 apartments in Olomouc. Last year, construction declined compared to the previous turbulent year. In the Olomouc district itself, 409 apartments were completed in 2023.

New buildings are being built all over Olomouc as part of development projects that should revive the housing market. Among them are, for example, Šantovka Living, Byty Šibeník, Smetanka Park or Neředín garden. They especially have the potential to attract new investors. “A lot of development projects are being prepared here, but we know that families usually cannot afford these apartments. Part of the apartments will end up as investments again,” comments Dobrozemská. “Without development projects, there is no supply of apartments. The construction of new apartments will revive the real estate market comprehensively. There are projects that are in the offing for the time being,” Korytar objects.

Even the city itself is starting construction. He is currently preparing three projects, he wants to build 50 to 60 new apartments. “I know of three projects in which it is realistic that we will build or renovate them, if we can coordinate all the investments so that we finance them at the same time as the city’s other obligations. Investments go up to hundreds of millions, so building a new home is not entirely easy“, adds Dobrozemská.


The article is in Czech

Tags: Good investment expensive rent Olomouc housing market specifics

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