The latest housing market report for Prague shows a strong increase in demand for new apartments. In the first half of the year, 3,500 units were sold, marking a significant rise compared to the previous year. The prices for new apartments reached a new record high.
Recent data from the housing market confirm the growing interest in new apartments in Prague. Asking prices surpassed the 155,000 CZK per square metre mark, reaching a new all-time high. The supply of apartments also saw a slight increase. This is reflected in the market analysis by the development companies Central Group, Skanska Residential, and Trigema.
In the first half of this year, 3,500 apartments were sold, which is a substantial increase (+112%) compared to the same period last year and one of the best sales halves in the entire observation period. After a significant drop in demand in the second half of 2022, the market has been growing for six consecutive quarters, with sales reaching a higher level than before the COVID-19 pandemic. In the second quarter of this year, 1,900 units were sold (+90% compared to last year), the highest number since the record quarter of 2021, when 2,650 units found new buyers.
Several key factors have contributed to the rise in demand, primarily the gradual decrease in interest rates and the easing of mortgage conditions, the general improvement in the economic situation, and the ongoing increase in rents. Marketing incentives and bonuses have also had a significant impact, although these are currently being substantially reduced by sellers. Thanks to these factors, the demand that was postponed over the past two years is returning to the market in a significant way, and interest in new apartments is expected to rise further with additional reductions in interest rates.
The average asking price for new apartments reached 156,780 CZK/m² by the end of the second quarter, representing an increase of almost 3% since the beginning of the year and setting a new historical high. Sale prices also saw a similar increase since the start of the year, reaching 146,961 CZK/m² in the second quarter. Given the rapidly growing demand and the long-term lack of supply, it is expected that the moderate price increase will continue.
By the end of June, 5,700 new apartments were available in Prague. Although the second quarter of this year saw the highest number of apartments for sale in the last four years, strong demand only led to a slight increase in the total number of available new apartment units.
One major uncertainty remains the new building regulations and their impact on future approval rates for new builds, which have long impeded the steady development of the capital. Additionally, the growing rental market, which absorbs part of the supply, counteracts a faster increase in the number of apartments available for buyers to choose from.
