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The prices of new apartments in Prague are not projected to drop in the upcoming years and as of the second half of 2017, the average price per square meter is around 75,791 Czech Korunas. A rise of 15% in comparison to the previous year has in fact taken place, according to the data of the real estate companies Trigema, Sanska and Central-Group. In fact, over the past two years, the prices of new apartments in Prague have grown by over 33% and with them the average rental rates – they have risen over the first months of 2017 at an even higher rate than the prices of the apartments.
According to the Czech Central Bureau of Statistics, over the past year 1342 new apartments have been built in Prague, representing a drop of 25% over the past six months in the supply of new apartments, to a level of 3600 apartments. Contractors in Prague claim that the reason for this is the long process that is currently required before one receives a building permit. According to them, in Denmark the process includes 5 stages, whereas in the Czech Republic it is made up of 33 different stages, which causes a construction project in Prague to last, on the average, 8 years. Of these 8 years, 2 years are spent on construction in practice, and 6 years are spent getting permits of various types.
However, the short supply is not the only cause for the price rises- additional reasons must also be considered. Chief among them is a high demand that is being driven by continuous economic growth and a rise in the real salary. Another reason is the attractiveness of the city, considered to be one of the employment hubs of Europe. Nonetheless, analysts project that the rises in real estate prices will slow down, but that the trend will not change. According to them, only an unexpected economic or political crisis might lead to a decline in apartment prices.
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