Prague sold 4,000 new flats last year, up 29 percent year-on-year. Their selling price fell 2.7 percent quarter-on-quarter and six percent year-on-year to CZK 142,511 per square metre in the last quarter. The offer price per square metre in a new Prague apartment was CZK 10,000 higher. At the end of last year, 5,500 new flats were available in the capital, down two percent quarter-on-quarter and eight percent more year-on-year. This is according to an analysis of the development companies Central Group, Skanska Residential and Trigema, which representatives of the companies presented to journalists today.
According to the analysis, the increased demand is mainly a result of the stabilisation of the economic situation. The end of the year was especially strong. In the fourth quarter, 1,300 new apartments were sold, up 24 percent quarter-on-quarter and 136 percent year-on-year. According to Petr Michálek, chairman of the board of Skanska Residential, the recovery of the new flats market has been noticeable since the second half of last year. Almost three quarters of the flats sold in 2023 were 1+kk and 2+kk. The average size of an apartment has fallen by 18 per cent since 2016 to 63 sqm.
According to the Czech Banking Association’s Hypomonitor, interest rates continued to fall in December, dropping from 5.67 percent in November to 5.65 percent, the lowest level since mid-2022. However, according to the analysis, the growth in demand was also influenced by marketing bonuses, introductory prices in newly launched projects and a reduction in the VAT rate from 15 percent to 12 percent for apartments up to 120 sqm, which some sellers reflected in prices before the end of the year.
All three development groups have long warned that there is a shortage of new apartments being built in Prague. If supply is not replenished in the future, they say, the lack of residential property on the market could lead to price increases. And by more than five per cent, as the Czech National Bank predicts this year in its latest report on financial stability.
“I expect that as the supply of new flats on the market gradually decreases and demand grows thanks to cheaper and more accessible mortgages, prices of flats will start to rise again from spring this year. And next year they may be ten percent higher than now. And there will certainly be a significant reduction in client bonuses,” said Dušan Kunovský, Chairman of the Board of Central Group.
Last year, the supply was limited by delays in some development projects caused by the slow sales pace in the first half of the year and high construction costs, especially the prices of building materials. The transformation of some projects into rental housing and the persistently slow permitting of new construction also had an impact. According to the latest data from the Czech Statistical Office, 3,608 flats in apartment buildings were permitted in the capital by last November, down 12.6 percent year-on-year.
Source: CTK
