DEVELOPMENT OF THE MARKET FOR SMALL FLATS IN THE CAPITAL CITY OF PRAGUE IN TERMS OF AVAILABILITY IN 2011-2020

The aim of the bachelor thesis will be to compare and evaluate (from the point of view of affordability) the development of the housing market in the capital city of Prague - the market with flats of 2 bedroom flats in the years 2011-2020. The comparison of the development of the average purchase price of a property per square metre shows that property prices in the capital city during the last decade have increased from 44,619 CZK in 2011 per square metre to 104,240 CZK in 2020, which means more than double the original value. In contrast to property prices, the growth in average wages has not seen such a markedly rapid pace. The average net wage in 2011 was CZK 23,563, so the price of a square metre was 1.9 times this, and in 2020, with a net wage of CZK 30,645, the price per square metre was more than three times this value. In order to understand the results more accurately, a conversion to an average 2-bedroom apartment (i.e. 55.5 sqm) was used and a statement of how much average net monthly wages are needed to achieve this property. In 2011, a 2-bedroom apartment would have cost an average of CZK 2,476,354. An applicant with an average net monthly wage of CZK 23 563 needed 105 of these wages to achieve the property. In 2020, the market was not so favourable for property buyers-this year the property cost CZK 5,785,320 and therefore there is a need for 189 average net wages to buy a property. The first variable examined in this bachelor thesis was the evolution of the average price per m2. This variable is the closest to the average rent per m2 in the period under study (especially in 2012 and 2019). On the contrary, the comparison shows that this value does not correspond to the completed apartments. The second variable examined, average wage, is the closest to the evolution of GDP in the period under study (especially in 2016-2019). The author concludes that it is possible to assume that wage growth will continue to accelerate and more closely resemble house prices, which are likely to slow down significantly or even stagnate. The affordability of owning a home is steadily declining and fewer and fewer people have a chance of obtaining a mortgage to finance it. Therefore, the paper concludes with the following recommendations: increasing the share of construction in urban areas (where the need is greatest), transport-oriented infrastructure development and more productive use of publicly owned land.