This year, the price of offered apartments also started to rise again. This follows from the analysis of the company Ekospol.
“Sales of new apartments in Prague revived significantly at the beginning of the year. The three-fold increase was mainly caused by the historically low comparative base from last year, but the first positive signals were also reflected. Mortgages have finally started to get cheaper after central bankers started cutting key interest rates. It is mortgages that are key to the real estate market, with up to half of people financing a new apartment in Prague in the long term through a mortgage loan. With the recent increase in the price and deterioration of the availability of mortgages, this share has fallen significantly in favor of buyers with their own resources, but this year the number of clients with a mortgage is increasing again.” said Evžen Korec, CEO and Chairman of the Board of Ekospol.
“Another important factor stimulating sales growth is the return of more affordable apartments to the Prague market. We already started it last year with the Výhledy Barrandov II project and continued it this year with the Ekocity Hostivař project, where at the start of sales we offered a price per square meter of a new apartment several tens of thousands of crowns lower than the Prague average.” added Evžen Korec.
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During the entire year 2023, developers in Prague sold a total of 3,650 new apartments, which represented a year-on-year increase of 52 percent. Nevertheless, it was the second worst year in the history of market monitoring. Expensive and unaffordable mortgages and an uncertain economic situation hit the Prague residential market mainly in 2022. For the entire year 2022, developers in Prague sold only 2,400 new apartments, which was the least in the last 20 years. By comparison, it was about the same as what was sold in the strongest second quarter to date of 2021. Year-on-year sales in the capital fell by 63 percent the year before.
The prices of new apartments are rising slightly again
The prices of new apartments have returned to moderate growth this year after previous stagnation at the end of last year. A square meter of a new apartment offered in developers’ price lists now costs 149,670 crowns. This is 1,770 crowns more (+1.2 percent) compared to the end of last year. Compared to the first quarter of last year, buyers will pay 1,720 crowns more per square meter (+ 1.3 percent).
The number of available apartments does not change much
Buyers also have a fairly good selection. There are more apartments in the developers’ price lists than there are for sale. So the supply still exceeds the demand. Those interested can currently choose from 4,560 available apartments, which is only 190 apartments less than at the end of last year.
“I expect that this year will be marked by an improvement in the availability of own housing. Mortgages will continue to get cheaper as the prime rate falls. This will strengthen the demand for own housing, which will be reached by more interested parties this year. Someone will use this to increase the selling price, but I think that affordable apartments will play a leading role. Construction companies are already able to offer very attractive conditions for large contracts with hundreds of apartments, which is also reflected in the price for the buyer. Thus, sales in the coming months will mainly be driven by apartments with the lowest price tag,” judge Evžen Korec.
