The Prague real estate market has experienced a significant surge in activity, with 7,200 new apartments sold last year—an 80% increase year-on-year. This data, collected over the past 13 years by leading development companies like Central Group, Skanska Residential, and trigema, marks the second-best year for apartment sales in the capital. three years ago,sellers managed to sell 250 more units,but the recent spike highlights a growing demand driven by rising prices and buyer urgency.
Josef Lebeda, a real estate shopping expert, explains this trend: “Those interested in living within a year realize that the prices of new projects will onyl be higher and are trying to take advantage of more cost-effective offers of apartments in projects that are already on sale.” This fear of escalating costs has fueled a rush to secure properties before prices climb further.
Marcel Soural, Chairman of the Board of Directors at Trigema, predicts that this high demand will persist throughout the year. Lebeda echoes this sentiment, noting that potential buyers are also anticipating a decline in mortgage interest rates, which could further stimulate the market. However, this sharp recovery is a double-edged sword. For those still contemplating a purchase, the window of possibility is narrowing. “Such a sharp market recovery is bad news for people who are just thinking about buying an apartment and cannot respond instantly,” the report states. Buyers this year will likely face higher costs as prices continue to rise.
The numbers paint a stark picture. In the fourth quarter, the average bid price for new Prague apartments reached a historic high of 163,203 crowns per square meter. This means a medium-sized apartment of 70 square meters was valued at nearly 11.5 million crowns by developers. Last year alone,new apartment prices increased by 7%,and projections suggest a further 5-10% rise this year.
Key highlights of the Prague Real Estate Market
| Metric | 2023 | 2024 projection |
|——————————–|————————|————————-|
| New Apartments Sold | 7,200 (80% YoY increase) | N/A |
| Average Price per m2 (Q4 2023) | 163,203 CZK | 5-10% increase expected |
| Medium Apartment Cost (70 m2) | ~11.5 million CZK | Higher |
The market’s upward trajectory is driven by a combination of factors, including buyer anxiety over future price hikes and the anticipation of favorable mortgage conditions. However, this rapid growth poses challenges for those unable to act swiftly. As prices continue to climb, the dream of owning a home in Prague becomes increasingly elusive for many. For more insights into the evolving real estate landscape,explore the latest analysis and expert opinions on the factors influencing housing affordability in the czech capital.
Prague and Brno Real Estate: Rising Prices Amid Limited Supply
The real estate markets in Prague and Brno are experiencing a significant surge in prices, driven by a combination of growing demand and limited supply. According to Vít Hradil,the chief economist of Cyrrus,this trend is expected to continue,with prices potentially rising by around seven percent.
“If we add a limited number of newly launched apartments in the recent construction and failure of the government project to simplify the construction proceedings, we have an explosive mix of growing demand and limited supply, which can hardly result in anything other than further price growth,” said Hradil.
Persistent Weak Offer Fuels Price Increases
At the end of last year, only 5,700 apartments were available in Prague, reflecting a persistent weak offer. Developers are gradually launching postponed projects onto the market, but once these stocks are depleted, the number of available apartments is likely to decrease again due to slow permitting processes.
This scarcity is not limited to Prague. Brno is also witnessing high demand for new buildings. According to data from the developer company TRIKAYA,approximately 1,300 apartments were sold in Brno last year,compared to fewer than 500 the year before.
Rising prices Across the Board
The average bid price for a new apartment in Brno increased by less than five percent to CZK 131,300 per square meter. This means a 70-square-meter new building now costs about 9.2 million crowns.
| City | Available Apartments (End of 2022) | Average Price per Square Meter (2023) |
|———-|—————————————-|——————————————-|
| Prague | 5,700 | N/A |
| Brno | N/A | CZK 131,300 |
Discount Actions Remain Rare
With demand outstripping supply, discount actions are becoming increasingly rare. Developers are focusing on launching new projects rather than offering price reductions. This trend is expected to persist as the market continues to tighten.
For more insights into the real estate market, including how investors are filling new apartments despite significantly higher rents, check out this detailed analysis.
The combination of limited supply, growing demand, and slow permitting processes is creating a challenging environment for buyers. As prices continue to rise, the need for effective government intervention to streamline construction proceedings becomes increasingly urgent.
Stay informed about the latest developments in the real estate market by following our updates and expert analyses.
