The popularity of the residential segment in the Czech Republic has increased among investors due to its stability. The availability of owner-occupied housing is decreasing, and trends are showing different younger generations' lifestyle requirements. According to a C&W report, investment in rental residential projects in the Czech Republic has tripled year-on-year.
In 2023, a total of €1,290 million was invested into commercial real estate in the Czech Republic, of which investment into rental housing amounted to €167 million, three times more than in the previous year. The share of this segment within the total volume of commercial real estate investment amounted to 13%.
Investors are interested in Prague locations, but also in regional cities such as Brno or Pilsen. Investment into the Czech residential segment was the highest in Central and Eastern Europe last year, both in absolute volume and relative share. In the EMEA region, investments in the residential sector accounted for 22% of the total invested volume last year.
In Cushman & Wakefield‘s European Living Investor Survey 2024, 53% of respondents said they had already allocated more than 20% of their portfolio to this segment. Almost 80% of respondents expect their investment to increase over the next five years, with 35% expecting it to increase significantly.
Trends in the Czech Republic follow those in the main European markets (UK, Germany, Spain) – although to a lesser extent. Abroad, it’s more common for investors to target segments that are labelled as alternatives in the Czech Republic: with growing numbers of both local and international students, half of the respondents are investing in student housing. To diversify within the living sector, they also target affordable housing, senior housing or co-living – segments that are expected to grow in the medium term.
Another trend that cannot be overlooked for the future is sustainability, as stated by investors in housing in the Czech Republic and across Europe. Nearly 80% of the survey respondents said it is a key aspect in their portfolio, and 70% are willing to pay extra for projects with superior sustainability features such as ground-source heat pumps, recirculation of (not only) rainwater, green facades or modern multi-storey timber buildings.
