Unaffordability of CEE house prices driving growth of PRS

CEE cities such as Prague, Bratislava and Warsaw are fast becoming unaffordable for home buyers and are among the top five least-affordable cities according to Lukáš Hejduk, partner and head of real estate, CEE, at law firm CMS.

This is one reason that the region’s new private rented sector is flourishing, Hejduk explained.

CMS and CBRE have recently produced a report which examines the economic and legal fundamentals of the CEE’s burgeoning PRS real estate sector.

“Together with the economic challenges, such as a higher inflation rate and higher interest rates, the costs of owning or acquiring homes is becoming very high, so people are pushed from traditional homeowning to renting,” Hejduk said.

Developers have already responded and new projects are emerging across the region. The PRS sector is also becoming “institutionalised” and so a new asset class is forming. This has been aided by a supportive legal framework.

“The legal regulations around lease agreements are very flexible in most CEE countries and allows landlords to tailor their lease agreements according to their needs,” Hejduk said.

Please click on the video above to watch the full interview or listen to the podcast below.