Welcome to another edition of Real Estate Week — my Monday look back at what happened to mortgages, rents and housing here in Brno and South Moravia over the past seven days. No scaremongering and no wall of tables: what changed, and what it means for you. If you like hard numbers, you will find them all together at the end of the article.
This week had one clear headline — mortgages got more expensive again, and the Czech National Bank signalled it is in no hurry to change that. On top of that came a rather unpleasant number from the Brno rental market and a new decree on housing support. Let's take it step by step.
Czech mortgage rates in August 2026: highest in two years
The average offered mortgage rate rose for the fifth month in a row in August and reached 5.42% — the highest level in exactly two years. It is not a jump, more of a slow but persistent climb, and over six months it adds up: on a model mortgage of CZK 3.5 million over 25 years the monthly payment now works out at roughly CZK 21,327, about CZK 1,100 more than in March 2026.
In the same week the CNB Bank Board left interest rates unchanged — the two-week repo rate stays at 3.75%. The fresh forecast also points to broad stability of short-term rates rather than a decline; inflation is expected to rise temporarily towards 3% early next year and only then return close to the target.
What it means for buyers: waiting for "mortgages to get cheaper" clearly was not a good strategy this year, and according to the CNB forecast that is not about to change soon. If you have a realistic budget and you have found a property that suits you, there is little point in postponing the decision over a tenth of a percentage point. What does pay off today is shopping around several banks or using a broker — the differences between offers are noticeable, and a lot depends on how much you have saved (rates up to 80% LTV are markedly lower than above 80%).
What it means for sellers: more expensive mortgages narrow the pool of people who can afford your property and stretch out selling times. An asking price "with room for haggling" works worse than it used to — a buyer whose bank has approved a specific amount simply cannot go higher. A realistic price from day one is now the faster route to a signature.
Before you fall in love with a particular flat, have your bank or broker calculate what you can genuinely afford at today's rates — not based on what friends told you last year. The difference in the monthly payment can easily exceed a thousand crowns.
Rent prices in Brno: student housing up 8% year on year
The rental market always comes alive as September approaches — and this year's figures are not good news for students or their parents. Brno is the second most expensive city in the country for student housing after Prague: the median asking price for a room in a shared flat is CZK 9,450 per month, up 8% year on year. For comparison, in Prague you pay CZK 11,950, but there the increase was only 2%. Smaller university cities such as Olomouc or Zlín come out cheaper.
This nicely illustrates why flats in Brno are in such demand. Every autumn the universities bring thousands of people who need somewhere to live, and supply does not keep up. Rising rents in turn keep pressure on flat prices — smaller layouts within reach of public transport and the campuses are exactly what investors target.
What it means for landlords: if you own a 2+kk or 3+1 flat in an accessible part of Brno, August and early September are the strongest months of the year and demand is genuinely high. That is still no reason to overshoot on price — tenants compare, and an overpriced listing will sit there until October, when the season is over.
What it means for buy-to-let buyers: rents in Brno are growing faster than in Prague, which is good news for yields. But count all the costs, not just the gap between rent and mortgage payment — and at today's mortgage rates the financing is significantly more expensive than two years ago.
Housing support: new Ministry decree on accounting for contributions
Decree No. 141/2026 Coll., issued by the Ministry for Regional Development under the Housing Support Act, was published in the Collection of Laws. It sets out exactly how the individual contributions are to be accounted for — for administration, for the provision of guaranteed housing, for sublease housing, for supported municipal housing and for assistance. It was published on 6 August 2026 and takes effect on 1 January 2027.
What it means for you: honestly, this is primarily an administrative regulation for municipalities and organisations that provide supported housing — it does not directly affect an ordinary tenant or landlord. I mention it mainly because the whole system of the new housing support is gradually falling into place. If your municipality is preparing to apply for one of the contributions, you now know what the accounting will look like.
What does it mean for foreigners on the Czech real estate market?
Nothing new specifically for foreigners this week — the same rules apply for Czech, EU and non-EU citizens. The evergreen basics below still hold.
Who can buy. There is no longer any restriction based on citizenship for buying a flat, a house or land in the Czech Republic. Czech nationals, EU citizens and non-EU citizens alike can buy property in their own name, and a foreign company can buy as well. You do not need residency or a permit to own Czech real estate.
Mortgages are a different story. Buying is open to everyone; getting a Czech mortgage is not automatic. Banks assess your residency status, the type and length of your residence permit, where your income comes from and whether it is paid in Czech crowns. EU citizens with a Czech employment contract are usually treated close to Czech applicants; non-EU applicants often face a higher required down payment and more documentation. With the average rate now at 5.42% (see the numbers section), it is worth approaching more than one bank — policies for foreign applicants differ far more between banks than headline rates do.
Currency matters. Czech property is priced in Czech crowns and Czech mortgages are repaid in crowns. If you earn in euros, dollars or another currency, your effective cost moves with the exchange rate, and banks may apply a stricter income calculation for the same reason. Factor that into your budget rather than treating today's rate as fixed.
The rental angle. The rent figures above apply to everyone equally — there is no separate foreigner rate. If you rent out a Czech property, rental income is taxable in the Czech Republic regardless of where you live; how it interacts with your home country depends on the relevant double taxation treaty.
Always verify with a professional. Rules on residence, taxation and bank lending change and depend on your individual situation. Treat this as orientation, not legal advice — for your specific case, check with a Czech lawyer, a tax adviser and your bank before you sign anything.
💡 Tip of the week
Does your mortgage have a fixation period coming to an end? Do not leave it to the last minute. Your bank will send you an offer for the new rate roughly three months in advance, and that is an offer, not a final word — you can have refinancing calculated elsewhere and come back to negotiate with it. At today's rates around 5.4%, a tenth of a percentage point on a multi-million crown mortgage can add up to tens of thousands of crowns over the fixation period.
For those who like numbers
I promised hard data — here it is, with sources:
- Mortgages more expensive for the fifth month in a row. The Swiss Life Hypoindex rose in August 2026 by 0.10 pp to 5.42% — the highest value in exactly two years. Rates by fixation and LTV: 1 year 5.18% / 5.47%, 3 years 5.17% / 5.47%, 5 years 5.41% / 5.72%, 10 years 5.93% / 6.18% (up to 80% LTV / above 80% LTV). A model mortgage of CZK 3.5 million over 25 years means a payment of CZK 21,327 per month, roughly CZK 1,100 more than in March 2026. (source: Swiss Life Hypoindex via Hypoindex.cz, 9 Aug 2026)
- The CNB left rates unchanged (6 Aug 2026). Two-week repo rate 3.75%, discount rate 2.75%, Lombard rate 4.75%. (source: Czech National Bank press release, 6 Aug 2026)
- CNB forecast: broadly stable rates, inflation temporarily towards 3%. Headline inflation 2.0% (2026), 2.5% (2027), 2.4% (2028); 3M PRIBOR 3.7% (2026), 3.9% (2027), 3.7% (2028); GDP growth 2.2% / 2.7% / 2.5%. Core inflation is also driven by imputed rent, which reflects rising prices of property, construction work and materials. (source: CNB Blog, 7 Aug 2026)
- Student housing: Brno the second most expensive in the country. Median asking price for a room in a shared flat: Prague CZK 11,950 (+2%), Brno CZK 9,450 (+8%), Hradec Králové CZK 7,750 (+3%), Pardubice CZK 7,706 (+14%), Plzeň CZK 7,250 (+7%), Liberec and Olomouc CZK 7,000 (+8% and +6% respectively), České Budějovice CZK 6,750 (+4%), Jihlava CZK 6,500 (+8%), Zlín CZK 6,475 (+8%), Ostrava CZK 6,225 (+13%), Ústí nad Labem CZK 5,750 (+5%), Opava CZK 5,667 (+3%). A small flat in Prague costs a student roughly CZK 21,000. (source: Sreality.cz analysis for Q2 2026 via Hypoindex.cz, 6 Aug 2026)
- Decree No. 141/2026 Coll. on accounting for contributions under the Housing Support Act. Issued by the Ministry for Regional Development under Section 99(4) of Act No. 175/2025 Coll.; decree dated 30 July 2026, in force from 6 Aug 2026, effective from 1 Jan 2027. It governs the accounting requirements for the contribution to administration, to the provision of guaranteed housing, to sublease housing, to supported municipal housing and to assistance. (source: Collection of Laws / Zákony pro lidi)
- Supply context: construction is growing. Czech construction output rose by more than 4% in the first half of 2026, with residential construction leading the way. (source: Hypoindex.cz, 6 Aug 2026)
- Banks are in good shape. The CNB's supervisory stress tests confirmed that domestic banks could withstand even a marked deterioration in economic conditions — for the mortgage market this means the price increases stem from the cost of funding, not from concerns about bank stability. (source: Czech National Bank, 4 Aug 2026)
Note: neither the Financial Administration nor Constitutional Court case law produced anything this week that directly affects ordinary buyers, sellers or landlords.
Thanks for reading. See you next week over whatever the market brings.
— Pavel Maloušek, Realiťák Brno