According to the CG Index of the development company Central Group, a new apartment in Prague with an area of 70 sqm currently needs 16 annual average gross wages, which is two more than last year. The index calculates the average gross monthly wage in the metropolis of CZK 50,556 and the price of a new apartment with the stated area of CZK 9,626,234. Representatives of the development company stated this at Tuesday’s press conference. According to them, apartment prices have risen by 90 percent in the last five years, but wages have risen by only 33 percent. Therefore, they consider the availability of housing to be the worst in the entire period of monitoring the CG-Index. It works with data from the Average Earnings Information System (ISPV) of the Ministry of Labor and Social Affairs and is based on prices resulting from a joint analysis by Central Group, Trigema and Skanska.
According to the founder and head of Central Group Dušan Kunovský, the way out of the crisis is to support new construction and achieve a sufficient supply of new apartments while maintaining market conditions with competition from development companies and mortgage banks. In connection with the construction and the fact that end users of flats often do not have the opportunity to buy the flat, as the entire apartment complex is bought by the investor, but Kunovský stated that investment flats should not be perceived negatively. According to him, the apartment will rarely remain empty and unoccupied. And the state receives relatively large amounts of VAT on the investment apartment, just as the city receives a contribution to the development of infrastructure from each completed and sold apartment, he added.
According to Central Group estimates, the value of all apartments in preparation in Prague is currently CZK 1.2 trillion. According to the company, the state would currently receive at least CZK 155 billion in VAT on them.
According to the developer, most flats have been permitted and built in Prague 9 for a long time. According to Central Group spokesman Ondřej Šťastný, three times more flats have been permitted in this part of the city in the last ten years than the Prague average. The average selling price of new flats in Prague 9 thus reaches CZK 115,285 crowns per square meter, which is 8.8 percent less than the average of the metropolis. “If it were allowed everywhere as in Prague 9, the prices of flats in Prague would certainly be lower,” said Šťastný.
According to joint data from Central Group, Trigema and Skanska, there were only 2,750 vacant flats in Prague at the end of the third quarter of this year, ie 52 percent less than a year ago. In its forecast for 2022, Central Group does not anticipate that the number of apartments offered will increase. However, he also expects a decline in the number of flats sold in connection with the deteriorating availability of mortgages.
Source: Central Group and CTK
