Helgi's Point - Residential Rental Yields in the Czech Republic

Czech real estate prices have tripled over the last decade in USD terms. The average dwelling (a 64 sqm flat) costs around USD 70,000. In Prague, the Czech capital city, however, you would pay over USD 150,000 for a flat of the same size. The affordability of housing has improved in recent years, especially when lower interest rates on mortgages are taken into account. To buy a flat, it would take an average earner over four annual gross salaries now, as seen on the right hand side chart. When taking into account falling yields (and interest rates on mortgage loans, which could be as low as 3% now), residential properties seem to be an interesting investment, with yields exceeding 5% on average in the country. When looking at the attached chart, some properties might be offering a rental yield exceeding 8% a year. So, work in Prague, but invest in Ostrava!