The complicated process of construction permits in Prague has resulted in a slowdown of apartment construction, even though there is a high level of demand for apartments. Between January 2016 and the end of August, 32 percent less housing construction was begun compared to last year. Specifically in Prague, which once had the highest proportion, housing construction fell by 78 percent, according to the server Lidovky.cz. The Pilsen region currently tops the market share tables with 25 percent, while Prague managed just 19.8 percent as of the end of August. The construction of 645 units in residential buildings in Prague was started as of the end of August.
“When it comes to above-standard and premium apartments, we register a positive market mood and high demand, which is, however, not matched by corresponding offer. The number of newly offered apartments continues to decrease, and with developers reporting a deficiency of new projects, apartments of this type are simply missing in the market. The situation has deteriorated continually for many years, so the current positive mood in the market has only emphasized the mentioned feature. There is no doubt that the deficit of apartments in the market is one of the main reasons behind the rather significant rise in apartment prices,“ said Prokop Svoboda from the Svoboda & Williams real estate agency. He also believes that the fact that apartments have been disappearing from the market is also clear from the total number of offered apartments in the market, which has been dropping steadily and has now reached historic lows.
According to Svoboda, it is clear that “the reason behind the described state is the approval process for buildings in the Czech Republic, which is one of the lengthiest in the world. The situation is becoming truly dramatic. Prague has suitable plots of land which are rife with opportunites, often at very lucrative addresses. Prague features companies which are more than capable of doing the construction, money is available and the demand is high. There is only one thing missing – the official’s stamp.“
