Prices for New Apartments in Prague Rose by 5.5 Percent

Year-on-year sales prices for new apartments in Prague have increased by an average of 5.5 percent to CZK 112,233 per square meter compared with 2.2 percent appreciation last year, housing developers report.

Data from construction companies also showed that the number of apartments sold has skyrocketed by about three-fifths to 2100, the most in the last ten years. At the same time, the number of apartments offered has dipped by more than a one-tenth to 4200, the least in the last three years.

By category, developers sold mostly two-room apartments, namely 44 percent. They were followed by one-bedroom apartments (23%), three-bedroom apartments (22%) and four-bedroom apartments (11%).

Of the individual districts of the city, developers sold the most apartments in Prague 5 (23%), Prague 9 (18%) and Prague 4 (16%). In contrast, in Prague 1 and 2, only three percent of all the apartments were sold.

Housing developers claim prices will continue to rise provided that local governments approve new projects at the same pace as they do now.

“Currently, the market is experiencing record-high demand for new housing. The highest in ten years, actually. However, the situation is still complicated due to the lack of new residential housing construction, which is currently insufficient to respond to the needs of the public in a timely and flexible manner. The reason remains the same – the complicated and lengthy process of permitting new projects,” said Marcel Soural, chairman of the board of the firm Trigema.

“The situation is becoming critical. The new supply has absolutely no time to cover the increased demand, which is why now we observe the least number of apartments on the market in three years. Because of this, prices for new apartments continue to rise. If the situation with the permitting of new apartments does not change and local governments remain reluctant to approve new construction, the current state will not improve,” said Dušan Kunovský, owner of the housing company Central Group.

According to the real estate portal Bezrealitky, prices for renting apartments with a separate working area are also rising. The portal associates this trend with a prospect of working from home even after the coronavirus restrictions are lifted.

The greatest interest in apartments with a workroom by far is observed in Prague and Brno, which are also the cities with the highest density of office space per capita.

This type of apartments is offered at a higher price – flats with a workroom are about fifteen percent more expensive than comparable layouts.