- The European Investment Bank Group’s Advisory Services will help to tackle the housing shortage that currently affects around 270 000 people in Czechia.
- EIB Advisory will support the Czech government in developing a strategic framework for the affordable housing sector and look into relevant investment options.
- In addition, the partners will work to identify and screen a pipeline of potential investment projects that could attract different types of financing, including from the EIB.
The Advisory Services of the European Investment Bank (EIB) and the Czech Ministries of Finance and Regional Development will work together to support the development of the affordable housing sector in Czechia. Under an agreement announced in Prague today, EIB Advisory will help the Czech government to formulate a strategic framework for the sector. It will also look into options that can boost investments in rental housing projects. The assignment is funded by the InvestEU Advisory Hub.
According to a study commissioned by the Czech Ministry of Labour and Social Affairs at the end of 2022, approximately 270 000 people in the country are suffering from a shortage of decent and affordable housing. The issue is particularly acute in cities, where many low- and middle-income earners find it difficult to buy or rent an apartment.
EIB experts will assess the housing market to get an overview of the demand and identify investment gaps and barriers to the delivery of affordable housing projects. They will also look into examples of European good practice and draw on them to provide recommendations to the Czech government. Based on these recommendations, the government plans to develop a strategic framework for the sector and targeted investment models. Finally, the EIB advisory team and its Czech counterparts will identify a pipeline of potential affordable housing projects across the country and screen them for maturity and relevance.
“Affordable housing is not just a basic necessity, but also a vital factor in enhancing people’s overall well-being,” said Kyriacos Kakouris, EIB vice-president with oversight for operations in the Czech Republic. “By ensuring the availability of quality and affordable housing for all, we can actively combat inequalities and foster greater social inclusion within our communities. I am proud that the Czech government relies on EIB expertise for this important goal, and I trust that our work will support the development of the affordable housing sector in Czechia, attracting investments from both public and private sources.”
Ivan Bartoš, Deputy Prime Minister for Digitisation and Minister of Regional Development, said, “Investment initiatives aimed at fostering affordable housing have been integral components of housing policies across numerous European countries. It is my aspiration for the Czech Republic to also adopt such initiatives. The European Investment Bank (EIB) stands as a pivotal partner in this endeavor, offering invaluable expertise drawn from their extensive experience within this domain in numerous countries. Leveraging this expertise should facilitate the establishment of a strategic framework encompassing the entire sector, thereby enhancing our ability to attract financing from international partners. I greatly value the advisory role in identifying a pipeline of viable projects, which will enable us to swiftly transition into project implementation.”
According to a study by the Organisation for Economic Co-operation and Development (OECD), 75% of people in the Czech Republic live in their own properties. The proportion of households that rent in the publicly subsidised market is very low, at 1.4%. In general, Czech households face above-average housing-related expenditures compared to other OECD countries. Additionally, house prices in the Czech Republic have risen faster than household disposable income, particularly in urban areas. This has created challenges for newcomers, especially the younger generation, in entering the housing market.
The strong and growing demand for housing in Czech cities has not been met by a sufficient increase in housing supply. Construction activity remains below pre-2009 levels, exacerbating the situation. The housing stock in Czech cities is often ageing and requires energy efficiency improvements. However, the European Union’s Renovation Wave and the Affordable Housing Initiative present an opportunity that, if used effectively, could alleviate the shortage in the future.
Background information
About the EIB and EIB Advisory Services
The European Investment Bank is the long-term lending institution of the European Union (EU). It finances sound investment contributing to EU policy goals.
The EIB offers a large range of advisory services that embrace all stages of the project cycle to make investment projects happen within and beyond the European Union. Advisory activities constitute the third pillar of the lending, blending and advising strategy pursued by the EIB Group. Through its advisory function, the EIB Group supports the European Commission, EU countries and public authorities, private companies and financial partners in pursuit of overarching EU goals – to accelerate the green and digital transition and to tackle social and economic inequalities on the continent.
About InvestEU
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal.
The InvestEU Advisory Hub, through advisory support offered to project developers, improves the quality of investment projects and their alignment with the EU long term policy goals.
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