The average price of a new building sold in Brno has risen by 192 percent since 2013, i.e. over the past ten years. A square metre of new housing in Brno cost an average of CZK 43,200 in 2013, compared to CZK 126,100 per square metre last year. In Prague over the same period, new buildings have become more expensive by 175 percent on average, while the average wage has risen by 60 percent in ten years. The developer Trikaya, which has been collecting and evaluating the data regularly since 2013, said this in an analysis of the market for new flats.
“New apartments are becoming unaffordable for a growing group of people. If we want to provide enough apartments at an affordable price, the private sector and the city must find a dialogue leading to new forms of cooperation. We need to take inspiration from elsewhere in Europe and look for forms of cooperation that will have a real impact on housing affordability,” said Dalibor Lamka, Trikaya’s CEO and Chairman of the Board.
Over the past decade, prices of new apartments in Prague have also risen, with the average selling price per square meter of new housing there increasing from CZK 53,700 in 2013 to CZK 147,800 last year, an increase of 175 percent. The data from the Prague market comes from statistics from Trigema, Skanska and Central Group.
The reason for the rise in apartment prices is the same in both Prague and Brno – fewer new apartments are being built than are needed, so demand has long outstripped supply.
“Investing in one’s own real estate in the Czech Republic has traditionally been one of the most popular ways of securing it, which has also been helped by low mortgage rates in the past decade. They averaged 2.6 per cent, even lower than the average inflation rate of 3.2 per cent in the same period. Czechs thus poured massive amounts of borrowed funds into the real estate market, as evidenced by the volume of mortgage loans. While in 2012, banks recorded 10.3 billion crowns in an average month, their lending peaked in 2021 at just under 51 billion crowns,” said Vít Hradil, chief economist at Cyrrus.
The growth of new apartment prices slowed down in the second half of last year, when prices in Brno stabilised and have not grown significantly so far. Along with inflation, mortgage rates rose last year, but despite this, interest in new housing in Brno has continued.
Source: CTK
