Friday, 8 May 2026
An increase in residential construction activity across the Czech Republic during the first quarter of 2026 is unlikely to slow the rise in housing prices, particularly in Prague, where demand continues to outpace supply.
Data published by the Czech Statistical Office (ČSÚ) showed that nearly 9,700 homes entered the construction phase during the first three months of the year, representing a year-on-year increase of almost 17 percent. Despite the improvement in activity, analysts and market specialists say the figures remain insufficient to resolve long-term shortages in the country’s largest urban markets.
While construction activity increased nationally, much of the growth was concentrated outside the capital. Regional cities and surrounding areas recorded stronger development momentum, while Prague itself experienced a slowdown in newly launched residential projects compared with the previous year.
Market observers note that this geographical imbalance limits the impact additional construction may have on overall affordability. Demand in Prague remains significantly stronger than in most regional markets, supported by population growth, limited available stock and continued interest from buyers despite elevated financing costs.
Developers and economists say the market is still dealing with the consequences of several years of underbuilding. Although housing completions remain relatively stable, the pace of new supply is not considered sufficient to close the structural gap between demand and available housing.
The situation is particularly visible in the capital’s new-build segment, where asking prices continue to rise. According to market analyses from major residential developers and property platforms, prices for new apartments in Prague development schemes remain above CZK 180,000 per sqm, while older apartments across the Czech Republic also continue to record price growth.
Industry experts also caution that planned regulatory changes aimed at accelerating permitting procedures are unlikely to deliver an immediate reduction in apartment prices. While faster approvals could support higher construction volumes over the longer term, analysts argue that residential values are still primarily driven by the imbalance between supply and demand rather than by construction costs alone.
At the same time, geopolitical tensions and higher energy prices are creating additional uncertainty for the sector. Rising material, labour and financing costs continue to affect developers’ calculations and may place further upward pressure on future housing prices.
Property consultants say that sustained growth in housing supply over several years would be required before meaningful price stabilisation could occur, especially in Prague, where housing availability remains one of the market’s most persistent challenges.
