Saturday, 15 March 2025
The demand for new flats in Prague has skyrocketed this year, with 5,350 units sold in the first three quarters, nearly double the number sold in the same period last year. This marks a 34% increase compared to the entirety of 2023, according to data presented by property developers today. The sharp rise in demand has also driven up prices, with the average price per square meter in a new apartment building now standing at CZK 160,720—an increase of 6.8% year-on-year and 2.5% compared to the previous quarter.
Despite a traditionally slower summer period, 1,850 new flats were sold in Prague during the third quarter alone, just 50 fewer than in the second quarter. However, compared to the same period last year, this represents a significant increase of more than 75%.
“Interest in new flats remained extremely strong in the third quarter, even during the quieter summer months. This year’s sales figures are approaching the record levels of 2021, when residential projects were nearly sold out,” said Petr Michálek, Chairman of the Board of Skanska Residential. He added that given the current market conditions, the strong demand is expected to continue in the coming months.
Developers attribute this surge in demand to several factors, including postponed purchases from previous years when the market was hindered by high mortgage rates and unfavorable macroeconomic conditions. As buyers return to the market, the increased interest has accelerated price growth beyond expectations. By the end of the third quarter, the prices of new apartments in Prague exceeded the 5% growth forecasted by the Czech National Bank for 2024.
A significant factor in the price increase is the depletion of cheaper flats, with approximately two-thirds of the available units seeing price hikes. New projects launched during the third quarter were on average 3% more expensive than previously available flats, further contributing to the upward trend in prices. Developers predict that prices will continue to rise by several percentage points in the near future, driven by high demand and limited supply.
In addition to demand pressures, developers are also facing challenges in increasing supply. At the end of the third quarter, 5,750 new flats were added to the market in Prague, a modest 1% quarter-on-quarter increase and 2.7% year-on-year growth. Despite this, the overall supply of flats has grown at its fastest rate in six years over the last two quarters.
Developers have long called for streamlined construction processes and faster permitting to keep up with demand, but they argue that the current state of digitalization and recent changes to the building law have not been helpful. Without further reforms, they warn, the pressure on prices is likely to persist.
Source: CTK
