New apartments in Prague have increased in price year-on-year by 27.9 percent to 137,946 CZK per m2

Prague - The selling prices of new apartments in the last quarter of last year in Prague increased by 27.9 percent year-on-year to 137,946 crowns per square meter. The quarter-on-quarter growth was 9.1 percent. In 2021, 7,450 new apartments were sold in Prague. This is evident from the joint analysis by the development companies Trigema, Skanska Reality, and Central Group, which they presented today at a joint press conference.

"Last year was the strongest in sales in the last 13 years that we have been evaluating the market. The sales last year primarily reflected the buyers' efforts to protect their savings from inflation and the awareness that an apartment is a safe asset that can generate returns in addition to its value growth. It can be said that the driving force behind the growing demand was private and increasingly also institutional investors," stated Marcel Soural, Chairman of the Board of Trigema.

In 2021, the number of offered apartments was historically the lowest. Last year, the number of new apartments on the market was consistently maintained at 3,300, which was 1,980 fewer than in 2020. According to the development companies, this was the lowest continuous offering in the last ten years. The offering was similarly low only in 2017, when 3,725 new apartments were continuously available.

In the fourth quarter of 2021, there were 2,850 vacant new apartments available, which was 100 more than in the previous quarter, but in year-on-year comparison, it was a decrease of 2,100 vacant apartments, or 42.4 percent.

The developers further emphasized that between 2011 and 2020, an average of only 2,900 apartments were permitted per year. From January to November 2021, according to the presented information, 6,330 apartments were permitted, which is the highest number for this period since 2007; however, according to Dušan Kunovský, founder and head of Central Group, it is still not sufficient.

"The situation is really critical. And it seems that nothing will change in the coming years, as the new building law that could help is being delayed and changed. Meanwhile, faster permitting is in the significant economic interest of the state. In Prague alone, more than 130 thousand new apartments are in preparation, which could bring over 155 billion crowns to the state just from VAT," Kunovský stated.

According to developers, the estimated value of the new apartments sold in Prague last year exceeded 57 billion crowns. The average asking price, that is, the price at which apartments are offered but not purchased, was 144,408 crowns per square meter as of the last day of last year.

Petr Michálek, Chairman of the Board of Skanska Reality, stated that he sees the significant year-on-year price increase as a buying boom related to the buyers' interest in saving their savings, low supply due to slow permitting, but also record prices of materials, labor, and energy. "All of this was exacerbated by an election year, which unfortunately again did not contribute to greater predictability in the market, nor to the acceleration of permitting processes," he said.

Development of average price per m2 of sold new apartments in Prague (including VAT):

Period	Price (CZK)	Year-on-year change (pct)
Q2 2013	54,308
Q3 2013	54,401
Q4 2013	54,738
Q1 2014	55,800
Q2 2014	55,500	2.2
Q3 2014	55,751	2.5
Q4 2014	56,177	2.6
Q1 2015	56,178	0.7
Q2 2015	55,555	0.1
Q3 2015	58,156	4.3
Q4 2015	59,885	6.6
Q1 2016	60,517	7.7
Q2 2016	65,922	18.7
Q3 2016	69,517	19.5
Q4 2016	71,567	19.5
Q1 2017	72,131	19.2
Q2 2017	75,791	15.0
Q3 2017	83,150	19.6
Q4 2017	85,223	19.1
Q1 2018	88,552	22.8
Q2 2018	94,000	24.0
Q3 2018	96,000	15.5
Q4 2018	101,091	18.6
Q1 2019	104,666	18.2
Q2 2019	102,058	8.6
Q3 2019	106,713	11.5
Q4 2019	105,561	4.4
Q1 2020	106,392	1.6
Q2 2020	108,261	6.1
Q3 2020	110,117	3.2
Q4 2020	107,877	2.2
Q1 2021	112,233	5.5
Q2 2021	118,480	9.4
Q3 2021	126,409	14.8
Q4 2021	137,946	27.9

Source: Trigema, Skanska Reality, Central Group

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