Eduard Hromada

CTU in Prague,

Prague, Czech Republic

E-mail: eduard.hromada@fsv.cvut.cz

ORCID  0000-0002-8336-8710

Hedonic pricing, rental yield and housing affordability: The Czech micro-apartment market and its lessons for Central and Eastern Europe

Renata Schneiderova Heralova

CTU in Prague,

Prague, Czech Republic

E-mail: heralova@fsv.cvut.cz

ORCID 0000-0003-3402-0686

Klára Čermáková

University of Finance and Administration,

Prague, Czech Republic

E-mail: klara.cermakova@vsfs.cz

ORCID 0000-0003-4392-1611

Ondřej Venhoda

Prague University of Economics and Business,

Prague, Czech Republic

E-mail: ondrej.venhoda@vse.cz

ORCID 0009-0003-7991-8569

Irina Alina Popescu

Bucharest University of Economic Studies, Romania

E-mail: alina.popescu@rei.ase.ro

ORCID 0000-0003-1303-5264

Abstract. Micro-apartments, the smallest self-contained dwellings, have expanded rapidly as a response to the housing affordability crisis, yet they remain almost unstudied in the Central European context. This paper analyses the micro-apartment segment (16-23 m²) in the Czech Republic and compares it with two larger categories of small apartments, using listing-level data from January 2018 to June 2026. It combines descriptive analysis with hedonic regression, quantile regression, an Oaxaca-Blinder decomposition, and a survival analysis of time on market. Micro-apartments are simultaneously the cheapest apartments in absolute terms and the most expensive per square metre; this unit-price premium of about 22 percent is genuine and structural rather than a product of location or composition, and it strengthens in the upper price bands. The premium is economically rational, underpinned by the highest gross rental yield of all categories, which makes the segment both an affordable outlet for budget-constrained buyers and an investment product for small landlords. Micro-apartment prices are also the most sensitive to mortgage rates, whereas the smallest units sell at least as quickly as larger ones, so the premium does not reflect impaired liquidity.

Received: August, 2025

1st Revision: April, 2026

Accepted: June, 2026

DOI: 10.14254/2071-789X.2026/19-2/6

JEL Classification: R21, R31, C21

Keywords: hedonic pricing, micro-apartments, housing affordability, quantile regression, rental yield, real estate market