Housing crisis: The government should create conditions that allow us to do business with peace of mind

It was an honor to participate in a debate on the housing crisis organized by Seznam Zprávy as part of the Czech Elite project. Also accepting the invitation to the discussion were Radka Vladyková, Executive Director of the Union of Towns and Municipalities; Dušan Kunovský, owner of Central Group; and Tomáš Spurný, CEO of Moneta Money Bank. As always, the entire debate was moderated by the excellent Zuzana Hodková.
Compared to other European countries, the Czech Republic ranks among those with the least affordable housing. High mortgage costs combined with rising real estate prices create a situation where buying a home is practically impossible for many. Young people in particular, who lack sufficient financial support from their families, cannot afford to buy a home.

Price increases are inevitable in this situation

Meanwhile, apartment prices continue to rise, and the current geopolitical situation is further amplifying this trend. The conflict in the Middle East is already impacting the construction industry—we, too, have seen prices for key materials such as steel, cement, and insulation rise by 10 to 20% over the past two weeks. If the situation fails to stabilize within the next few months, we can expect another wave of price increases across the entire sector, including housing.
This development comes at a time when the market was beginning to stabilize gradually after a series of crises—from COVID to the war in Ukraine. Instead, the construction industry is once again entering a phase of uncertainty. Higher costs will inevitably be reflected either in construction prices or in the postponement of planned projects.
Our goal is, of course, to keep prices as low as possible. We, too, have an interest in ensuring that our apartments are sold and rented. The reality, however, is that we cannot influence the prices of input materials—we import approximately 75% of them. Likewise, there is only limited scope for savings in other areas; we do not want to cut wages, and we cannot keep construction prices at current levels because that would not make business sense. A rise in construction prices is therefore largely unavoidable in the current situation.

“We have a strong private sector that can weather temporary crises. The state’s role should primarily be to ensure security and a stable environment—business will then manage on its own.”

In my opinion, the key role of the state and European policies is to ensure peace, stability, and predictability. The private sector will handle everything else. However, the state must not create further obstacles. Czech legislation plays a crucial role, particularly the Building Act in our case. We need a predictable and functional legislative environment that allows for the effective preparation and implementation of projects. Any legislative uncertainty or a lengthy approval process will sooner or later translate into higher housing prices.
Speeding up permitting processes is therefore absolutely crucial. Today, even high-quality and necessary projects face extremely long approval processes. To illustrate: we waited 15 years for a building permit for one of our major projects, while construction took only 2 years—that speaks for itself.
In closing, thank you for the opportunity to be part of this discussion, a recording of which you can watch on Seznam Zprávy. We didn’t find a clear-cut solution for affordable housing in the discussion, but one thing is clear: it won’t work without the state playing an active role. We want to build and we will, but the state should create the conditions for us to do so, so we can do business in peace and pay our taxes. Only then can enough apartments be built.