Prices for new apartments in Prague are up nearly 20% year-on-year

According to data from developers Trigema, Skanska Reality and Central Group, the cost of a new flat in Prague in the first quarter of 2019 was up 18.2% over 2018. Prices are expected to continue to rise in the near future.

While the year-on-year rise represents a huge increase, it’s actually slightly less than surge in prices between 2017 and 2018. Since June of 2015, the cost of a new apartment in Prague is up a whopping 88%.

From the fourth quarter of 2018, however, prices of new apartments in Prague are up a more modest 3.5%. Prices are also getting closer to the initial prices set by the developer, at 1.4% higher in the first quarter of 2019 compared to an average of 8.8% above during the last six years.

Developers forecast similar growth in the near future.

“In the following months, the average price is likely to grow slightly, but not so dramatically,” Marcel Soural, Trigema’s Chairman of the Board, stated in a press release.

“Of course, increased availability of new apartments would help lower prices.”

The lack of new developments is often cited as one of the biggest reasons for Prague’s surge in apartment prices over the past years.

Despite high demand, developers sold only 1,200 new apartments over the first three months of 2019, and over the course of the year are expected to sell the fewest new apartments since 2012.

“The problem is not in the interest of new apartments, but in the artificially limited availability [of new apartments] due to stalled permissions on one hand and inaccessible mortgages on the other,” commented Dušan Kunovský, Chairman of Central Group’s Board of Directors.

“Only if several major projects for the middle class become available on the market can demand be met and price increases stopped.”