Average price for new Prague apartments breaks new record

In Prague, apartment prices have once again broken records, with the average offering price surpassing CZK 160,000 per square meter in the third quarter of 2024, according to a quarterly analysis by developers Central Group, Skanska, and Trigema.

Apartment prices in new development projects around Prague exceeded five percent growth, driven by awakened demand, the inclusion of more expensive development projects in sales, and a limited supply on the market. 

A total of 5,350 new apartments were sold in the first three quarters of this year, almost 100 percent more year-on-year.. People stopped postponing the purchase of housing, as mortgages are only getting cheaper while the price of housing is steadily increasing, the developers said. 

"After the previous two years of stagnation, the housing market took off in a big way this year, and apartment prices are growing faster than expected," noted Dušan Kunovský, chairman of the board of Central Group. "The dysfunctional permitting and lack of housing on the market will continue to push prices up," he added.

The demand for apartments is driven by deferred demand from previous years, when the market was hampered by negative macroeconomic influences and expensive mortgages. Developers have long pointed out that the current (inadequate) state of digitization of construction management and the new construction law do not help either.

According to the findings from consulting firm Deloitte, the age of people who buy apartments has increased significantly. "In Prague, it was 44 years on average, compared to 37 years in 2014.” Analysis from earlier this year found that it takes 25 years of rent to pay off an apartment in Czechia. Citizens of Prague must save an equivalent of 13.5 gross annual salaries on average to buy an apartment. 

The analysis shows that smaller and cheaper apartments go on sale the fastest. Traditionally, Prague 9 has the widest range of them within the capital city. Conversely, Smíchov, Karlín, and Holešovice are among the more expensive locations.

Other above-average priced apartments in attractive locations, such as the So-Ho Residence in Holešovice, are for sale. Its developer Cresco Real Estate launched the sale of the second stage with almost two hundred apartments at the beginning of October. House construction is already underway, and the investor is not complaining about the lack of interested parties. 

"For the first month of sales, we have reserved around 20 percent of the apartments," said Lucie Barcalová, Cresca's sales manager. According to her, the greatest interest is in smaller 2+kk and 1+kk apartments.