8,283 new flats were permitted in Prague for the whole of last year. This is the most in modern history. In the years 2011 – 2020, only 2,900 flats per year were permitted on average. This is a great result in this light. Still, there is no reason to rejoice. According to a study by IPR and ČVUT, the metropolis needs at least 10,000 flats a year.
The population of Prague has been growing at a rate of around 10,000 to 15,000 per year in recent years. Even last year’s record year is not enough to allow the pace of urbanization. The deficit of flats in the metropolis continues to grow. The demise of the housing stock and its necessary renewal must also be taken into account. Developers are active in the preparation of new projects. 130,000 flats are already waiting to be launched on the market. A quarter of them are being prepared by the Central Group, which can sell 1,000 flats this year as well as last year and up to 2,000 in the following years.
However, the flats are not being allowed fast enough and in sufficient numbers. The package of apartments being prepared is therefore constantly expanding. Its current value is CZK 1.2 trillion. The state would have over 155 billion crowns out of all 130,000 planned flats for VAT. Faster licensing is in the great economic interest of the state.
The building law should be changed only in 2 points:
The new building law promises significant improvements. It should be adjusted on only two points of contention. Building authorities should remain at the level of municipalities and local governments should be given greater powers in spatial planning. If the Building Act were to be redrafted on several points, it is not possible to prepare a meaningful version of the amendment during the period declared by the government (1st half of 2022).
Without a progressive new building law, housing supply and the availability of new housing will not improve, and the government will not be able to meet its program statement. For example, the construction of 10,000 rental apartments a year in addition at the end of the election period.
Author: Central Group
