Apartment prices and rents in Prague are rising again. The reason for this is the fall in mortgage rates and therefore increased interest from buyers. The average offer price of new flats rose by 1.4 percent to CZK 152,425 per square meter over the last six months, even though there are 5.4 percent more flats on the market year-on-year. Over the same period, prices of older flats also rose by almost a fifth to CZK 127,463 per square metre. Rents in Prague have increased by six percent over the past year and two percent over the past six months. This is according to an analysis by real estate consultancy Knight Frank.
“New-build sales, which have been significantly subdued since 2022, are now experiencing an almost meteoric rise and dominating the current market. Developers who have been holding projects ready to bring them to market at a more favourable time are gradually increasing the number of properties on offer. The question now is how quickly and in what quantity the apartments will come to the market and how their future price will develop in relation to this,” said Kateřina Poláková, Head of Residential at Knight Frank.
According to Knight Frank, apart from those interested in new housing, investors who have invested their financial resources in real estate immediately reacted to the interest rate cuts. And not only in the purchase of new flats, but also older flats, as reflected by the increase in prices in this segment as well.
The number of transactions is significantly dominated by purchases of small flats, which have long been considered a stable and profitable investment. However, there is also significant interest in the most expensive flats on the market. In transactions involving flats with a price above CZK 200,000 per square metre, 5+kk and 6+kk flats lead the list, followed by 2+kk and 1+kk. In sales, on the other hand, the smallest units are only in the penultimate position before 4+kk.
Average rental prices per sqm in individual rentals according to listings in most Prague locations have continued to rise slightly over the last six months. On the other hand, rents fell most significantly in Prague 1, especially for larger apartments in the 5+kk category. On the other hand, in Prague 6, rents increased most significantly for small apartments 1 + kk and also for large apartments 5 + kk.
According to the latest analysis by Deloitte, the average rent in the first quarter was CZK 295 per square meter. The price in institutional and partially or fully furnished “build to rent” rental housing also increased by 3.5 percent year-on-year. The average price in the smallest flats 1+kk was over CZK 600 per square metre. Knight Frank expects rents to continue to rise by around five to ten per cent per year.
Source: Knight Frank and CTK
