Construction companies in the Czech Republic began construction of 5,201 new flats in apartment buildings by the end of May this year, up 3.3 percent year-on-year. At the end of April, the number was 2.1 percent lower. Most of them were in Prague, where by the end of May their number had fallen by 26.8 percent to 1,640. The number of started construction of family houses in the Czech Republic fell by three percent year on year. This follows from today’s data from the Czech Statistical Office (CSO).
By the end of May, Prague accounted for 31.5 percent of newly started apartment building construction. This was followed by the South Bohemian Region with a share of 18.2 percent, the South Moravian Region (12.2 percent) and the Central Bohemian Region (12 percent). On the contrary, in the Karlovy Vary region it was 0.5 percent with 28 flats.
The number of newly built family houses in the Czech Republic fell by three percent year-on-year to 8,218 by the end of May. with a share of 6.6 percent. The lowest number was in the Karlovy Vary region (2.4 percent) and in Prague (2.5 percent).
Together with other categories, such as superstructures, built-ins and boarding houses, individuals and construction companies began building 16,089 flats by the end of May, up 1.2 percent year on year. The Central Bohemian Region had the largest share (17.1 percent). This was followed by the South Moravian Region (14.5 percent), Prague (12.5 percent) and the South Bohemian Region (ten percent, the smallest being in the Karlovy Vary Region (1.7 percent)), which is the smallest in terms of population.
“Good news is finally coming from housing construction. In May alone, the construction of more than 4,000 apartments and houses began, a number we saw here once in 2019. In the first five months, however, housing construction increased by only about one percent year on year. which is still small given the persistent shortage of flats. In addition, the acceleration took place in regions outside Prague, “ČSOB analyst Petr Dufek told ČTK.
According to BH Securities analyst Štěpán Křeček, there is still an insufficient supply of flats on the real estate market, which leads to a sharp rise in prices. “Flats have become an investment item and are used for speculative transactions,” he said. For example, in Prague, according to data from developers Trigema, Skanska Reality and Central Group, sales prices of new apartments have risen by 102 percent since mid-2015 to 112,233 crowns per square meter. The number of flats offered by developers fell by more than a tenth year-on-year to 4,200 in the first quarter, which is the least in the last three years.
The Czech Republic has been facing a housing crisis in recent years. According to data from the World Bank, the Czechia is 156th out of 190 countries in the process of processing building permits. The new building law is supposed to improve the situation, but it has a number of critics. The norm was approved by the Chamber of Deputies, but last week it was rejected by the Senate and the lower house will discuss it again. It needs a majority of all its members, ie 101 votes, to approve it.
Source: CSO and CTK
