Abstract
Household energy constitutes an important share of affordable housing. Unaffordable housing and inadequate household energy represent a new dimension of poverty. Connections between energy, housing affordability and well-being are still under-researched. Building on housing affordability framework, this study explores the magnitude in changes in affordability of acquisition and use of an apartment between January 2018 and January 2022. Over the last four years, the real estate market in Europe has changed significantly. This paper deals with primary data for the Czech Republic, where acquisition prices of residential real estate increased depending on the region in the range of 50 to 120%. Since January 2022, there has been a sharp rise in energy prices and a tightening of conditions for the acquisition of mortgage loans. All these factors affect the standard of living in the Czech Republic. The article quantifies the magnitude of this change by calculating shares of total housing costs to total average net household income for the period January 2018 and January 2022. It is found that the affordability of owner-occupied housing in the Czech Republic has deteriorated and part of the middle class will be forced to move to the rental housing sector, multifamily housing and sharing. Finally, we argue that energy poverty needs to be considered in addressing the government housing policies. The aim of the article is to analyze the changes that have taken place in the real estate market over the last four years in relation to the growth of total housing costs and energy costs associated with housing.
Highlights
For many years, the real estate market the Czech Republic has experiences a stable development
The Czech property market has been for long attracting foreign capital
In response to institutional factors—as Ouechtati [2] proves that stable institutional variables attract foreign investment. This was the case of the Czech Republic [3,4], where institutional stability induced large amounts of foreign capital to invest in the Czech property market
Summary
The real estate market the Czech Republic has experiences a stable development. In response to institutional factors—as Ouechtati [2] proves that stable institutional variables attract foreign investment This was the case of the Czech Republic [3,4], where institutional stability induced large amounts of foreign capital to invest in the Czech property market. A second factor inviting foreign investors to the Czech property market was the temporary significant depreciation to the Czech Koruna during the first wave of COVID pandemic [5]. All these factors contributed to a sharp and continuous increase in property prices. This reality, combined with a change in the European Union’s energy policy (Green Deal) which, as a result, brings a sharp increase in energy prices [10] in relation to housing, has increased costs of housing [11], making housing less affordable for lower middle and middle class of population and not least for the young generation
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