In the third quarter of this year, 1,050 flats were sold in Prague, which is 91 percent more than in the same period last year and five percent more than in the previous quarter. The average selling price per square meter was CZK 146,459. This is down three per cent quarter-on-quarter and one per cent year-on-year. The most sold were 2+kk flats, while the worst sellers were 3+kk flats. This is according to the quarterly analysis of the development companies Skanska Residential, Trigema and Central Group, which their representatives presented today.
“Next year, mortgage interest rates should start to fall significantly, which will further strengthen demand,” said Dušan Kunovský, chairman of the board of Central Group.
During this year, interest in new flats in the capital has been growing steadily, with a total of 2,700 flats sold. According to experts, the number of new flats sold in Prague this year could exceed the 4,000 mark. This is still significantly less than in the record year of 2021, when 7,450 flats were sold, but compared to last year it would be about a one-third increase.
According to the analysis, the increased demand is due to the stabilisation of the economic situation and a more positive outlook for future developments. The mortgage market is also recovering. According to the Czech Banking Association’s Hypomonitor, the interest rate on genuinely new mortgages without refinancing fell to 5.74 per cent in September from 5.78 per cent in August.
Prices of new flats have seen a slight decline, but are still around CZK 150,000 per square metre. According to developers, they were influenced, among other things, by the fact that several projects with lower introductory prices or special payment terms appeared on the market. The offer price per square metre was CZK 150,437 in the third quarter, down one per cent quarter-on-quarter and 2.4 per cent year-on-year.
“A decline in supply is very likely in the coming periods, which, combined with recovering demand, will push prices up again. At the same time, further substantial rental growth is evident. The average rent has exceeded CZK 30,000 per month, while institutional rents are a third higher and supply in this segment continues to grow,” said Marcel Soural, chairman of the board of Trigema Investment Group.
According to experts, a smaller number of apartments have gone on sale in the last year than it used to be. Due to the high prices of construction work and materials and expensive loan financing, many projects are being postponed because they are not profitable for investors. The slow pace of permitting new construction has also been a long-term obstacle to faster supply replenishment.
According to an analysis referring to the latest data from the Czech Statistical Office, 2,165 flats in apartment buildings were permitted in the capital in the first eight months of this year, one third less than in the same period last year.
The number of vacant flats in Prague has stabilised at a long-term average of between 5,000 and 6,000 units. However, according to Petr Michálek, chairman of the board of Skanska Residential, this is not enough to meet the needs of the metropolis with the growing demographic curve.
Source: CTK
