Saturday, 10 May 2025
The Czech real estate market saw significant price increases across all property categories in 2024, with apartment prices reaching a new record high. According to data from the ČSOB Housing Index, the price of flats increased by seven percent year-on-year, with a further 3.4 percent rise recorded in the final quarter of the year. Apartment prices have now surpassed their previous peak from the third quarter of 2022.
Martin Vašek, CEO of ČSOB Hypoteční banka, noted that the real estate market returned to steady price growth in 2024, driven by strong demand for both newly built and older apartments. The sales period for flats has also shortened, averaging 3.8 months.
The strongest quarterly price growth was seen in the Moravian-Silesian region, where prices rose by 4.6 percent. The Ústí nad Labem and Hradec Králové regions also recorded price increases above four percent, while Prague and Central Bohemia saw growth just below this level. The surge in demand was supported by an 80 percent increase in mortgage volumes, rising real incomes, and buyers seeking to secure properties in a rising market. However, supply remains limited, exerting additional pressure on prices.
While the availability of older apartments declined in the last quarter, the new-build sector is showing signs of recovery, including in regional markets. Developers in Prague and Brno have continued to raise prices with each new stage of development, with costs increasing by around five percent per phase. Smaller flats up to 45 square meters have been particularly in demand, contributing to above-average price growth in the sector. Rental prices also increased significantly, with a 15 percent year-on-year rise, the highest in Olomouc and the lowest in Ústí nad Labem.
In contrast to the apartment market, the house sector remained stable, with demand lower than pre-pandemic levels. The most active areas for house construction were in Central Bohemia and around Brno. A positive development for the sector was a slowdown in the rise of construction costs. However, transaction activity remained limited in areas affected by the September floods, as potential buyers wait for infrastructure reconstruction.
The land market continued to experience strong demand, outpacing supply and maintaining a steady upward trend in prices. The lack of available land is exacerbated by outdated zoning plans and limited utility capacity. As a result, buyers are increasingly looking at plots further from major cities, including those without existing utility connections. Advances in photovoltaics, domestic sewage treatment, and off-grid housing have made previously undeveloped land more attractive. Plot prices continue to depend on factors such as size, location, access to utilities, transport connections, and topography.
With rising demand and constrained supply, the Czech real estate market is expected to face continued upward price pressure in 2025, particularly in the apartment sector.
Source: ČSOB
