In Prague, 900 projects with 40,000 apartments are awaiting approval

Prague - Currently, there are 900 "frozen" projects in the permitting process in Prague, comprising approximately 40,000 apartments. This number has significantly increased in recent years. From the year 2000 until now, the annual number of issued zoning decisions and building permits decreased by about 75 percent. This was stated in a press release by the Czech Chamber of Commerce based on an analysis by the consulting company Deloitte.

"This alarming number of frozen apartments at various stages of approval is primarily responsible for the extreme rise in prices in recent years. If quick remedies are not taken, the shortage of apartments in the coming years will dramatically increase, and along with it, their price will also rise. The reasons are not only complicated legislation but also its misuse for obstruction," stated the president of the Chamber, Vladimír Dlouhý. According to the Chamber, this is not a real estate bubble, but a genuine shortage of new apartments on the market.

According to statistics from the development companies Trigema, Skanska Reality, and Central Group, by the end of September, the price of a new apartment in Prague increased year-on-year by an average of 19.6 percent to 83,150 crowns per square meter. Over the last two years, new apartments have become almost half more expensive. According to the director of the Association of Developers, Tomáš Kadeřábek, another reason for the price increase includes unnecessary technical requirements, such as mandated minimum light exposure for apartments.

"The current statistics on construction in Prague are alarming. However, the future is even more pessimistic if we do not succeed in fundamentally accelerating the pace of issuing future zoning decisions or building permits. The apartments currently being sold originate from applications submitted between 2010 and 2014," Dlouhý added.

According to him, a significant imbalance between submitted applications and issued building permits arises due to delays compared to the statutory deadlines at every level of the permitting processes (opinions, EIA, zoning decisions, building permits) and further in numerous appeals, review, and court proceedings. "Today, there is practically no project that has been discussed, assessed, and approved within the legally prescribed deadlines. The Chamber of Commerce calls for the creation of conditions in Prague and the Czech Republic that would fundamentally accelerate the project approval process," Dlouhý further stated.

Recently issued zoning decisions and building permits indicate a trend in housing availability in the coming years. "And here, Prague is gravely falling behind. In the year 2000, more than eight thousand building permits for apartments were issued in the capital, while in 2017 we estimate their number to be only around two thousand. And this is despite the increasing number of new applications,” added Deloitte analyst Michal Melč.

Issued building permits for residential buildings:

Year	Number
2005	7485
2006	7265
2007	6432
2008	5743
2009	5081
2010	4819
2011	4636
2012	4165
2013	3107
2014	3017
2015	2910
2016	2848
2017 (by the end of October)	1865

Source: Deloitte