This year, 5,350 new apartments were sold in Prague, doubling year-on-year

Prague – In the first three quarters of this year, 5,350 new apartments were sold in Prague, nearly twice as many as last year. Compared to the entire previous year, this is an increase of 34 percent. The higher demand has also impacted apartment prices. A square meter in a newly built apartment in Prague costs 160,720 crowns. Year-on-year, this is an increase of 6.8 percent and compared to the second quarter, it has risen by 2.5 percent. The selling price of apartments is approximately 8,000 crowns lower, but this has also increased year-on-year and quarter-on-quarter by about four percent. This is evident from an analysis presented to journalists by representatives of development companies today.

Sales of apartments during the summer months are usually lower compared to other parts of the year. In this year's third quarter, 1,850 new apartments were sold in Prague, which is 50 fewer than in the previous quarter. However, compared to the same period last year, this represents an increase of more than three-quarters.

"Interest in new apartments remained extremely strong in the third quarter of this year, despite the traditionally quieter period of the summer holidays. This year's sales figures are approaching the record results of 2021, when developers' residential projects were nearly sold out. Given the current market situation, we expect this strong trend to continue in the coming quarters," said Petr Michálek, Chairman of the Board of Skanska Residential.

According to development companies, the increased demand for properties is a result of postponed demand from previous years when negative macroeconomic influences and expensive mortgages hindered the market. The sudden surge in interest in properties is also sharply increasing their prices, and this is happening faster than developers had previously anticipated. At the end of this year's third quarter, prices for new apartments in Prague exceeded the five percent increase that the Czech National Bank had previously predicted in its financial stability report for this year.

According to the analysis, the price increase is partly due to the sale of cheaper apartments from the existing supply, which increased in price in approximately two-thirds of cases. The values were also influenced by the launch of sales for apartments in new projects. These were, on average, more than three percent more expensive than previously listed apartments. Given the demand and insufficient supply, developers expect further price increases in the coming years by a few percentage points.

Developers also attribute the pressure on prices to lower construction and the introduction of new apartments to the market. By the end of the third quarter of this year, 5,750 new apartments had been added in Prague. Compared to the previous quarter, the supply increased by nearly one percent and compared to the previous year, it rose by 2.7 percent, with the last two quarters seeing the largest number of apartments added to the market in the last six years. Developers have long warned that increasing construction would help simplify construction processes and speed up permits. The current state of the digitization of construction proceedings and the new construction law is not helping this situation either.