Housing Bubble
- Mar 2
- 1 min read
Is Prague in a property bubble? I spent the last year analyzing 16 years of market data to find out. The answer might surprise you.
Every week, I hear the same concern from clients: "Real estate here is overpriced. I’ll wait for the bubble to pop."
It’s an understandable sentiment. But "expensive" and "in a bubble" are two different things.
As part of my recent academic research, I applied the BSADF test (a statistical method to detect explosive behavior in asset prices) to the Czech housing market from 2008 to 2024.
Here is what the data actually says:
2010 – 2020: No bubble. Prices grew, but they made sense relative to the economy.
2021 – 2022: Bubble confirmed. This was the period of "Covid money," near-zero interest rates, panic buying and rental market destabilization. Prices decoupled from reality.
2023 – Present: Stabilization. The explosive bubble dynamic has vanished.
What does this mean for you?
If you are waiting for a 2008-style crash, you might be waiting a long time.
The data indicates we have returned to "normal" market dynamics. The prices you see today aren't driven by speculative mania anymore—they are driven by structural scarcity.
Especially in Prague, supply is incredibly rigid. Even when mortgage rates shot up and demand cooled, prices didn't collapse—they just froze.
We aren't in a speculative bubble anymore; we are in a supply-constrained market.
Waiting for a "pop" is no longer a strategy. It’s a gamble against a lack of inventory.
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