The strong demand for new flats in Prague last year was unmistakable. A total of approximately 7,200 flats were sold in the Czech capital in 2024—an increase of 80% compared to the previous year. However, supply continues to stagnate and cannot keep pace with the high demand. As a result, flat prices in the capital have risen faster than expected, with a 7% increase compared to the previous year, according to a recent market analysis by Central Group, Skanska Residential, and Trigema.
Around 1,850 flats were sold in the final quarter of last year, bringing the total for 2024 to 7,200—making it the second-highest figure in over 15 years. The record year of 2021, with 7,450 flats sold, was narrowly missed.
The housing market’s developments are closely mirrored in the mortgage market, where the volume of new loans has increased by 83% compared to the previous year. The primary factor behind the surge in interest for new homes last year was the reduction in mortgage interest rates. With further interest rate cuts anticipated this year, demand could increase even more, potentially reaching new record levels.
House Prices Rise Faster Than Expected
The average asking price for a new-build flat reached CZK 163,203/m² by the end of the year, an increase of 7% compared to the previous year. Sales prices, in turn, rose by 10% to CZK 156,851/m². Both figures reached new historic highs. The rate of price increase was higher than the Czech National Bank’s (CNB) forecast for 2024, although the CNB had previously warned that prices might rise even faster due to the imbalance between supply and demand. Given ongoing issues with the new building law and digitalization, this trend is expected to continue, with prices projected to rise by 5-10% this year.
The most affordable new-build flats are found in Prague 9 and 10, where average prices are just over CZK 149,000/m². The priciest areas remain the city centre (Prague 1 and 2) and Prague 7, with average prices exceeding CZK 200,000/m². The most significant price increase occurred in Prague 3, which saw a 21% rise compared to the previous year.
Supply Continues to Stagnate and Cannot Meet Strong Demand
By the end of the year, buyers in Prague had around 5,700 new flats to choose from. Supply has been stagnating at this level for the past two years. While more flats were sold last year than in previous years, it was still insufficient to meet the high demand. Additionally, most of the sold flats were from previously approved projects, where construction had been delayed by property developers due to weak demand, high building material prices, and high interest rates.
The portfolio of approved but postponed projects is gradually shrinking, while new projects are not being realised on time or in sufficient numbers due to ongoing issues with the approval process. According to the latest data from the Czech Statistical Office, 6,340 flats in apartment blocks were approved in Prague between January and November last year—significantly fewer than the 10,000 needed annually. Moreover, an increasing proportion of property developer output is being absorbed by the expanding rental housing market. As a result, there is a real risk that the supply deficit will worsen again.