Central Group, the country’s largest residential developer, announced that it will delay the launch of all new construction projects for the next year.

The company says the market has reached a level of overheating that no longer allows investors to price new developments responsibly.

The decision comes at a moment when the developer is experiencing one of its strongest years on record. Across Prague, the group currently has around 3,200 apartments under construction and reports strong sales.

Yet founder Dušan Kunovský told reporters that the company is no longer willing to begin new projects under current cost conditions.

According to Kunovský, the price of construction work and building materials has climbed to a point where buyers would be forced to absorb increases that he considers unsustainable. He described the trend as a “market that needs cooling,” adding that the company is taking a step back to avoid pushing apartment prices even higher.

Despite the decision, all projects already under construction will continue as planned. For developments currently in the tender phase, Central Group expects to determine within the next three months whether those projects will move forward or be pushed back.

This is not the first time the developer has paused major investments. Central Group took a similar step in 2022, when disruptions linked to the war in Ukraine, the energy shock and supply-chain failures made construction pricing unpredictable. At that time, the company was the first in the sector to halt large-scale developments, and other builders followed within months.

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Kunovský said the company’s goal is to anticipate where the market is heading rather than responding only to current conditions. He believes the present environment resembles earlier moments when rapid price growth forced the entire sector to reassess its plans.

However, industry leaders say that the current situation does not yet point to a broader crisis. Jiří Nouza, head of the Association of Construction Entrepreneurs, argues that most companies today have full order books and nearly all available capacity in use. He sees high activity but does not interpret it as an immediate risk for investors.

Data from CEEC Research shows that construction firms expect their revenues to grow in the coming years. Companies forecast average sales growth of 3.5% in 2026 and a further 2.7% in 2027, with the strongest momentum expected in residential building — the very segment where Central Group operates. Analysts point out that although demand remains solid, limits in workforce availability and production capacity may influence growth.

Prague continues to expand its housing stock at a steady pace. Last year, 6,511 apartments were completed in the capital, and construction began on another 8,191.

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