In the 3rd quarter, construction began on 5.3 pct fewer apartments than last year

Prague - In the third quarter of this year, construction of 11,914 apartments began in the Czech Republic, which is 5.3 percent less than in the same period in 2007. A total of 9,559 apartments were completed, which is 9.5 percent more than in last year's third quarter. There were 178,831 apartments under construction, an increase of 1.1 percent year-on-year. This was announced today by the Czech Statistical Office (ČSÚ).
  For the first three quarters of this year, according to ČSÚ data, the construction of 33,845 apartments was initiated, which represents an annual increase of six percent. The number of completed apartments also rose by nine percent to 26,074 from January to the end of September.
  Analysts do not view the year-on-year decline in the number of initiated apartments in the third quarter pessimistically. "Generally speaking, despite small fluctuations, the market has been growing in the long term - in the first three quarters of this year, the number of initiated, completed, and under construction apartments has increased compared to 2007," said analyst Ondřej Novotný from consulting firm King Sturge to ČTK. The Ministry of Regional Development (MMR) shares a similar assessment of this year's numbers. "The impact of potential financial difficulties has not yet significantly affected construction," stated MMR spokesman Jan Štoll.
  However, according to Novotný, a decline in apartment construction could occur due to the global market crisis at the turn of this and next year. "Developers, including those in residential projects, have more difficult access to bank loans, and many new projects remain on paper. Given that the implementation of current projects is delayed and some new ones are not starting, we expect a decrease in the supply of new apartments in 2009," noted the analyst.
  The most pronounced year-on-year decline in the number of initiated apartments occurred in the third quarter, with a decrease of 23.5 percent in apartment buildings. For structurally modified non-residential spaces, the number decreased by as much as 54.2 percent. Conversely, a growth of 9.4 percent in the third quarter was recorded in the initiation of apartment construction in family houses. Compared to the same period last year, the number of completed apartments in assisted living facilities and retirement homes has tripled.
  The number of completed apartments increased in all categories except for extensions, modifications, and conversions of apartment buildings, where there was a year-on-year decline of 23.5 percent.
  The highest share of construction was in family houses at 50.6 percent and in apartment buildings at 19.3 percent. "The number of construction projects has been increasing for a long time due to the lead of initiated apartments over completed apartments, and it also includes apartments whose construction has been temporarily halted," noted the statisticians.
  In the third quarter of this year, the modernization of 4,984 apartments was also completed, which is 31.4 percent more than last year.

Prague - Central Bohemian Region continues to hold its reputation as a "good address." In the region, from January to the end of September, 7,507 new apartments were started, which represents a year-on-year increase of more than a thousand newly initiated constructions. The number of completed apartments, however, slightly decreased during the same period. This is based on information released today by the Czech Statistical Office.
  While last year, builders completed 5,681 apartments in Central Bohemia during this period, this year it is 174 less. However, the number of newly initiated constructions is rising. The highest intensity of apartment construction in recent years has been observed in the districts of Prague-west, Prague-east, Nymburk, and Kolín. The largest number of completed apartments per 1,000 inhabitants in recent years has been recorded in the municipalities of Květnice, Mukařov, Mnichovice, Chýně, Nupaky, Bašť, Jenštejn, Holubice, Mratín, Jesenice, Vestec, and Šestajovice.
  However, the massive influx of residents is not matched by civic amenities. The main issues are inadequate infrastructure and a lack of spaces in primary and nursery schools. Some municipalities are already attempting to regulate apartment construction.
  Despite the increasing apartment construction, the number of residents with permanent residence in the region is not increasing, which adds to the municipalities' worries. For example, Jesenice near Prague officially has 5,500 residents, but according to estimates, an additional 1,500 to 1,800 people live there without residence registration. According to Mayor Zdeněk Pánek, this results in an annual loss of ten million crowns in taxes, which is at least one-tenth of the municipal budget.

Plzeň - Builders in the Plzeň Region completed 1,672 new apartments in the first three quarters of this year, which is almost 44 percent more year-on-year. The number of initiated apartments amounted to 2,005, which is a 35 percent increase from last year's nine months. This is indicated by today's data from the Czech Statistical Office. Regional builders confirm the boom in the region.
  Builders started constructing houses with 655 apartments in the third quarter, placing seventh among the 14 regions. In the previous three quarters last year, they initiated the construction of 1,484 apartments in the region. "The number of projects has been increasing for a long time due to the lead of initiated apartments over completed apartments, including apartments whose construction has been temporarily halted," the statisticians stated.
  Construction companies in the Plzeň Region completed 635 apartments in the first three quarters of this year, which is the fourth position in the Czech Republic after Prague, Central Bohemia, and South Moravia. In the first nine months of last year, they completed 1,164 apartments.
  The highest number of completed and initiated apartments is reported in Plzeň, as well as in the districts of Plzeň-north and Plzeň-south, followed by Klatovy and Domažlice. The worst situation is in the Tachov area, where unemployment is highest and public transport is inadequate. Town halls in the region are now only building social housing, which is subsidized by the state. Both small and large municipalities clearly prefer the preparation of plots.

České Budějovice - In South Bohemia, there are still more locations where new apartment and family homes are being built. Developers, cities, and private individuals completed 1,829 apartments from January to the end of September, which is a 40 percent year-on-year increase. The growth is not expected to stop in the coming months, as the number of initiated constructions is also somewhat higher. While last year 1,870 apartments began construction in the first three quarters, this year it was 2,177. This is based on data released today by the Czech Statistical Office.
  The number of new apartments rose mainly in the third quarter, when 824 were approved. People in South Bohemia are increasingly moving into new family homes. Over half of the apartments constructed this year are in family houses.
  Municipalities and smaller towns are offering subsidized plots to builders who want to retain residents. For example, Sedlice in the Strakonice area currently offers six more plots for the construction of family houses, with areas ranging from nine to 11 ares. They are located in the new residential zone of Vráž on the outskirts of the city. People pay 300 crowns per square meter. According to Mayor František Kopáček, they are trying to attract mainly young families to the city with about 1,300 inhabitants. Last year, the municipality managed to sell a total of 19 plots in the area.
  However, the construction of apartment buildings is also ongoing. In Vacov in the Prachatice area, the municipality completed twenty protected apartments for seniors in September. The building cost 24 million, with 16 million crowns coming from the state. The regional capital is also keeping pace, where a quarter called Luční jez is under construction. Over six years, 14 buildings with 280 apartments will be built there. New apartment buildings have also been constructed in Písek. The Czech Statistical Office has not yet released specific data for the districts.
  Apartment construction in South Bohemia has increased slightly over the past ten years. While 1,260 apartments were added in 1996, there were nearly 650 more last year. Builders have completed over 17,000 apartments during these years.

Karlovy Vary - In the Karlovy Vary Region, from January to the end of September this year, the number of initiated new apartment constructions increased by 160 year-on-year to a total of 565 apartments. The number of completed apartments during the same period rose to 500 apartments. This is 196 more than in the same period last year. This is based on data released today by the Czech Statistical Office.
  For the same period, construction of 33,845 new apartments began in the Czech Republic, which is 2,027 more than in the three quarters of 2007. A total of 26,074 apartments were completed, which is 2,248 more than from January to the end of September 2007. The Karlovy Vary Region remains last in these statistics among the regions.
  In family houses, which are the type of housing currently most sought after in the region, construction companies and individual builders initiated the construction of a total of 390 apartments in the Karlovy Vary Region from January to the end of September. Compared to the same period in 2007, this is 129 more constructions. The highest interest was, for example, in the Pod rohem location near Jenišov in Karlovy Vary. Houses were also started near Mezirolí and in Loket in Sokolov.
  The construction of larger apartment buildings lagged behind the construction of houses. Only 33 new apartments in apartment buildings were initiated in the Karlovy Vary Region from January to the end of September. Yet in the first quarter, there were only three apartments. Last year, there were only 19 apartments initiated in nine months. A total of 104 apartments were completed in residential buildings. In the same period of the previous year, there were 67 apartments.
  Future statistics in the case of larger apartment buildings could improve slightly with the initiated construction of an apartment complex in Karlovy Vary on Čertův island. Several houses are expected to be built in Cheb and Sokolov as well.

Ústí nad Labem - In the Ústí nad Labem Region, in the first nine months of this year, the number of apartments started construction was more than 11 percent lower than in the same period last year. Builders initiated construction of 1,393 apartments in the first three quarters of the year, compared to 1,566 apartments in the same period last year. The number of completed apartments in the region also decreased by nearly 13 percent. This is based on data released today by the Czech Statistical Office.
  According to experts, due to the current financial crisis, the construction boom, which was triggered last year by the change in VAT rate on construction works and the easy availability of cheap mortgages, is declining.
  In the region, 672 apartments were completed in the three quarters, which is 99 fewer than last year. Family houses still dominate among constructions, with a total of 505 families moving into them. In apartment buildings, only ten apartments were constructed during this period. The remaining completed apartments were extensions, modifications, and apartments in non-residential buildings.
  In apartment buildings, 298 apartments were started, which is 150 fewer than last year. Of those, 82 apartments were initiated in the third quarter. Construction of 698 apartments in family houses was started, which is 30 more than in the first nine months of last year.
  New apartments for 400 people are planned to be constructed, for example, in Staňkovice in the Louny area near the Triangle industrial zone. At the end of September, the construction of engineering networks began there. The municipality expects demand for apartments and the construction of family houses mainly from employees and middle management of companies from the nearby industrial zone. The developer of the ten-hectare residential zone with 62 family houses and four residential buildings with 31 apartment units is the Louny-based development company M2 Sors. The investment will require 30 million crowns, and the company has paid another 3.5 million crowns for municipal land.

Hradec Králové - Apartment construction in the Hradec Králové Region increased year-on-year by 19 percent in the first nine months of this year. Builders completed 1,205 apartments compared to 1,009 apartments in the first three quarters of last year. Growth is not expected to stop in the coming months, as the number of initiated apartments in the monitored period increased by 34 percent to 1,835 apartments. This was revealed by today's information from the Czech Statistical Office.
  Apartment construction in the Hradec Králové Region is growing significantly faster than in the whole Czech Republic. The number of completed apartments in the country increased by nine percent to 25,986 apartments by the end of September, and the number of initiated apartments grew by six percent to 33,845 apartments.
  More than half of the completed apartments in the Hradec Králové Region belong to family houses. In initiated constructions, family houses account for about 45 percent.
  Apartment construction in the Hradec Králové Region has gained significant momentum in the last four years. While at the beginning of the third millennium, builders initiated an average of about 1,500 apartments annually in the region, in the last two years, they have exceeded the 2,000 apartment mark. This is also expected this year.
  The most apartment buildings are being constructed in Hradec Králové, where prices are among the highest in the country. Development companies, for example, are building their projects in locations such as Plachta, Podzámčí, Terronic, or Plačice. Construction companies are also increasingly preparing their projects in smaller towns, where local governments often support them.
  However, according to construction firms, the current apartment boom will likely not last forever. "I fear that the market will overheat, and with rising mortgage interest rates, interest will decline," said Jiří Bojčuk, director of the Hradec-based construction company AGS Bohemiastav, to ČTK recently. According to him, already built apartments in attractive locations will sell well, while new projects will struggle.

Pardubice - Construction companies in the Pardubice Region constructed 36 percent fewer apartments in the first nine months than in the previous year. Last year, companies started 1,938 apartments. This year, for the first time in several years, they have smaller contracts, starting 690 apartments less. This data was released today by the Czech Statistical Office.
  "People are starting to be concerned about the financial crisis; they are cautious. They fear for their jobs. Also, mortgages have become more expensive and stricter. Today, the group of those who do not meet the bank's conditions has grown," said Jiří Požár, a member of the board of the Czech Union of Construction Entrepreneurs, to ČTK.
  The clientele is gradually declining in all districts of the region. In previous years, there were even waiting lists for new apartments; today, developers often have trouble selling constructions. Even firms with smaller capital are no longer seen as trustworthy partners by banks.
  "Large companies are leaving the region, leaving behind abandoned constructions, and they want to pass the hot potato on. Now I have been commissioned to sell 26 unfinished apartments in Polička," said Milan Mňuk from the Litomyšl branch of Ideal Reality.
  Last year, people were willing to buy new constructions even at high prices; this year, prices of new apartments are expected to fall. For example, in the Svitavy area, large companies offered new apartments for 30,000 crowns per square meter. If a smaller regional company takes over the construction, it could lower the price by up to 5,000 crowns per meter, Mňuk believes. However, according to Požár, significant and widespread declines in prices of new apartments are not expected.
  "There is not much room for price reduction in Pardubice. In smaller towns, it is even worse; there, apartment prices are even lower. There is nothing left to reduce in price," said Požár.
  People currently looking for new housing can benefit from the stagnation in the market for new properties. Prices of apartments in older developments are falling; for example, in the Orlickoústecko area, they have decreased by 15 percent, said real estate agent Maxim Ponomarenko from Choceň to ČTK.
  "The rich are buying, the poor are stagnating. We are a region with high employment, so there are still plenty of wealthier clients who buy apartments even in new developments that also have commercial spaces," the agent said.
  Developers who do not have, for example, transport constructions in their real estate portfolio will feel the market decline the most. The construction companies' results will not be significantly affected by the construction slowdown, as in the case of completed constructions in the first nine months of this year, statistics showed an increase of more than a hundred apartments. Construction enterprises recorded 1,057 apartment completions.

Jihlava - In Vysočina, from January to the end of September this year, 1,185 new apartments were completed, which is almost a fifth more than in the same period last year. This was mainly due to increased construction of apartment buildings. According to data released today by the Czech Statistical Office, the number of initiated residential constructions in the region is still comparable to last year, when builders started working on buildings with more than 1,300 apartments in the first three quarters of the year.
  The largest number of apartments in Vysočina were handed over for use in the 3rd quarter, with 477 apartments, while last year there were 431. Across the country, 9,559 apartments were completed in this period, representing a year-on-year increase of 9.5 percent. The number of apartments completed increased in all categories except for extensions, modifications, and conversions of apartment buildings.
  The largest year-on-year discrepancies in apartment construction in Vysočina occurred in the first half of the year. This year, 708 apartments were completed during this period, which is about 150 more than in the first six months of last year. This was mainly due to a higher number of completed apartment buildings. By the end of September, residents of the region received 273 apartments in them, which is more than double compared to last year. In family houses, 619 apartments have emerged during this year so far.
  Last year, the number of completed apartments in the region rapidly increased in the last quarter. A total of 1,681 new apartments were ultimately handed over for the entire year 2007, the highest number since the beginning of the 90s.

Olomouc - In the first three quarters of the year, the number of initiated and completed apartments in the Olomouc Region increased year-on-year. In the case of constructions initiated by builders in the region, the number increased by 4.8 percent to 1,717 apartments. The number of completed apartments rose by 30.4 percent to 1,264 apartments. This is according to data from the Czech Statistical Office.
  In the first three quarters of the year, a total of 33,845 apartments were initiated across the Czech Republic, which is a year-on-year increase of six percent. The number of completed apartments in the country increased by nine percent to 26,074 apartments from January to the end of September. Therefore, the Olomouc Region significantly outperformed the national average in terms of the growth rate of completed apartments but lags behind in terms of completed apartments.
  In the Olomouc Region, most apartments under construction in the first nine months of the year were in family houses. In the case of initiated constructions, their share of the total number stands at 931, making up more than 54 percent. Of the completed apartments, 574 were in family houses, accounting for over 45 percent.
  Apartment construction in the region is negatively impacted, among other things, by a lack of plots in large cities. Municipalities in these cities mostly leave apartment construction to development companies. For example, in Olomouc, private investors have initiated the construction of several hundred apartments in the Pražská location near the exit road to Mohelnice.

Zlín - A total of 860 new apartments were completed by builders in the Zlín Region from January to September this year. This is about 8.3 percent less than in the same period last year. The pace of initiated apartment construction has also decreased in the region year-on-year. While in the first nine months of 2007, builders started 1,406 new apartments, this year it was 202 fewer residential units. This is according to data released by the Czech Statistical Office.
  In the whole of the Czech Republic, on the other hand, the pace of apartment construction has increased year-on-year. In the first nine months of the year, 33,845 apartments were initiated across the country, which represents a year-on-year increase of six percent. The number of newly completed apartments also increased by nine percent to 26,845 by September.
  Meanwhile, apartment construction in the Zlín Region has gradually increased over the past four years. This is primarily due to development companies, which find the vicinity of the regional capital particularly attractive. New apartment buildings are currently being constructed in several locations in Zlín and also in Uherské Hradiště or around Luhačovice. According to experts, interest in new apartments is growing here primarily due to relatively good transport infrastructure and better employment opportunities.
  Fewer new apartments are traditionally constructed in the Vsetín and Kroměříž areas. According to experts, there are currently enough apartments in older panel buildings in Vsetín, which deters investors from further construction. In Kroměříž, a relatively large number of apartments have become available in the past due to the departure of the army.
  Most of the apartments completed this year in the Zlín Region are units in family houses. Out of the 860 completed, 529 were constructed this way. They also account for more than half of this year's initiated apartment construction. Conversely, the number of initiated or completed apartments in apartment buildings or complexes has decreased year-on-year.
  Last year, builders initiated a total of 2,010 new apartments in the Zlín Region. Compared to 2006, this was an increase of almost 17 percent. The number of completed constructions then increased by about 46 percent year-on-year to 1,661 newly completed apartments. In the entire country last year, the pace of initiated apartment construction only increased by 0.1 percent, while the number of completed apartments was 38 percent higher.