Prague sees biggest building boom in a decade, but new flat prices won't fall anytime soon

Prague is currently seeing the biggest boom in construction in the past decade, according to a report from the Prague Institute of Planning and Development (IPR Praha).

The city has long faced a housing shortage due to the slow increase in the number of new flats, which in recent years has been made even worse by the conversion of thousands of residential flats into short-term housing made available over web platforms. The lack of flats combined with high demand has been pushing up prices.

IPR Praha has released an analysis of residential development projects in Prague in 2020, and it was a mix of good and bad news.

“That is why we urgently need a new Building Act, to facilitate affordable housing and accelerate the construction process in the future,” he added.

IPR Praha found that as of September 2020, apartments in the city are being constructed more intensively than at any other time over the last 10 years. A total of 137 apartment construction projects are currently underway, which will create 14,450 new apartment units.

Roughly 5,500 to 6,000 apartments will be completed each year between 2020 and 2022, the report concluded.

Compared to September 2019, the number of current development projects has increased by 3%, from 133 to 137, and the number of apartment units to be created by these projects has increased by nearly 9%, from 13,293 to 14,450.

Of the total 14,450 new apartments to be built, one-third have yet to be sold. Potential buyers in September 2020 thus had nearly 4,800 apartments to select from, which is the greatest number available since 2011.

Despite the coronavirus pandemic having a large impact on flats that were being used for short-term accommodation, prices of flats have not fallen, but instead have even risen. The average price of apartments offered in these development projects was CZK 95,904 per square meter. A new apartment cost an average of CZK 8,455,226, which is roughly 1 million CZK more than in 2019.

As was the case last year, the most intensive area for apartment construction was Prague 5, which currently has 20 development projects with a total of 2,270 apartments in the pipeline. There were also major construction volumes in the districts of Prague 8, with 17 projects accounting for 1,610 apartments and Prague 9, with 13 projects accounting for 1,536 apartments.

The IPR PRaha survey only takes into account projects that were actually under construction in September 2020. Many other projects are in various stages of planning.

Several project are also in various stages of development in Prague’s Karlín area such as the Nová Invalidovna project and Rohan City, which together with other projects in the long run will create up to 1,750 flats and new parks.

In Holešovice, a project in the Bubny-Zátory former rail area is in the planning stages. It could eventually have 11,000 apartments.

The tallest building in the Czech Republic is planned for the Nové Butovice neighborhood, and could be completed in three years if the permits are obtained quickly.

 The future of the former Žižkov Freight Station (nákladové nádraží Žižkov) is one of several projects that will add more housing and shops to the Prague 3 district. Another is planned for the site of the former Central Telecommunications Building complex.

The new development next to Masarykovo nádraží, now called Masaryčka, was originally planned as an office complex but now will include 40% residential space. Construction is planned to start on two office buildings designed by British-Iraqi architect Zaha Hadid in 2021. Designs for the residential sections will come from a new architectural competition.