On paper, more new apartments are being built in Prague than ever before – yet the reality is different. Despite a record number of planned projects, little is actually progressing, as permits have been granted at a snail’s pace for years.
According to a recent analysis by the country’s largest residential developer, Central Group, more than 150,000 new units are currently planned. Yet the majority of these projects are stuck due to a long-standing dysfunctional permit system. The result: housing remains scarce and unaffordable for many – more so than in any comparable metropolis in the region.
Record Demand Meets Far Too Little Supply
The Prague housing market is experiencing an exceptionally strong year. In the first three quarters, 6,000 new-build apartments were sold. For the full year, Central Group expects a new record of 7,500 to 8,000 units sold. Yet while demand is booming, supply falls far short of actual needs. Persistent difficulties around construction and planning permits mean that new projects come onto the market far too slowly. The consequence: prices for new apartments in Prague have risen by eight per cent within a year – more than in any other Central European metropolis.
Slow Permitting Prevents Projects from Being Realised Quickly
Only around 5,000 new apartments are approved in Prague each year, although at least twice as many are needed. Over 20 years, this has created a deficit of almost 100,000 units.
And 2025 shows no sign of a reversal. In the first three quarters, barely 4,000 apartments were approved – the worst result of the past decade. Particularly striking: in August, only 27 apartments were approved, enough for just 50 people.
Five Annual Salaries More Expensive in Ten Years
The CG Index also shows how much the situation has worsened for buyers. Purchasing an average new-build apartment of 70 square metres now requires 14.8 gross annual salaries. That is a slight improvement compared with last year, but still five annual salaries more than in 2015.
Hope for Faster Permits
There are, however, signs that the permitting process could become more efficient in future. Both the government programme and the proposal to adapt the new building law aim at a significant acceleration. A simplified procedure could indeed shorten processes – but only if accompanied by a functioning digital infrastructure. The new government will need to act immediately after taking office to meet the planned start date of 1 January 2027. Even then, noticeable effects are only to be expected after a few years.
