New Apartments in Prague and Brno at Record Levels, but Prices Keep Rising
Housing construction in the Czech Republic has reached its highest level in years, and the supply of new flats in Prague and Brno has grown significantly. Nevertheless, property prices continue to rise.
Yuliia Harashchenko · Unsplash License
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Record number of construction starts
From January to August, construction began on nearly 30 thousand apartments in the Czech Republic, the most since 2008 (Bytů se staví nejvíce za poslední roky. Ceny přesto dál rostou – Novinky.cz). Data from the Czech Statistical Office show a clear recovery after years of decline. Construction output in September was 1.6 percent higher than a year earlier, although it fell 0.4 percent month on month (Stavebnictví roste, výstavba bytů ale proti loňsku zpomalila – Novinky.cz). The record therefore refers to the period from January to August. In September, the number of apartments started was already lower than a year earlier: it fell 1.2 percent, to 3,511 units.
Greater supply in Prague and Brno
The supply of new apartments in Prague reached its highest level in years, and in Brno it grew year on year. A comparison of the developers Central Group, Skanska Residential and Trigema shows that at the end of the third quarter buyers had a wider choice than a year earlier.
Asking prices and bank forecasts
Komerční banka forecasts that apartments and houses will become on average 4.4 percent more expensive next year, after roughly 8 percent this year (Zlevněných bytů přibývá. Banky čekají příští rok pomalejší růst cen – Novinky.cz). Raiffeisenbank predicts a 5.5 percent increase in 2027. Bank analyst Kevin Tran Nguyen assesses that the pace of growth will slow, and considers a price decline unlikely. The average offered mortgage rate rose by 0.9 percentage points since March, to 5.79 percent in October. For a mortgage of 3.5 million crowns over 25 years, this means an annual repayment about 22 thousand crowns higher. Some owners have already lowered their initial prices. According to the bank, more than a third of the apartments on offer are priced lower than originally.
Why construction is not lowering prices
Komerční banka economist Martin Gürtler points out that the increase in the number of apartments results from projects prepared earlier, not from changes in regulations. Builders are struggling with expensive materials and high interest rates. Gürtler believes that in the longer term greater supply may ease price pressure, although much depends on the pace of construction.
Rent under pressure
The growth in rental prices has slowed. According to Sreality.cz data, the slowdown has been visible in the largest cities for several months, and some tenants say they cannot afford another increase (Nájmy přestávají zdražovat. Lidé si další zvýšení nemohou dovolit – Novinky.cz). In the country, about a quarter of households live in rented accommodation.
Sources
- [1]
Bytů se staví nejvíce za poslední roky. Ceny přesto dál rostou· Novinky.cz - [2]Z nabídky pražských developerů ubyla více než desetina bytů. Cena za metr čtvereční přitom vzrostla na 186 700 korun | FXstreet.cz· fxstreet.cz
- [3]Nové byty v Praze zdražují na 186 700 korun za metr | Newstream· newstream.cz
- [4]
Zlevněných bytů přibývá. Banky čekají příští rok pomalejší růst cen· Novinky.cz - [5]
Stavebnictví roste, výstavba bytů ale proti loňsku zpomalila· Novinky.cz - [6]
Nájmy přestávají zdražovat. Lidé si další zvýšení nemohou dovolit· Novinky.cz
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