According to an analysis published by the developers Central Group, Skanska Residential and Trigema, the new housing market in the metropolis had an exceptionally strong year. A total of 7,200 new flats were sold in Prague last year, the second highest figure in the past 15 years. 2024 thus fell only slightly short of 2021, when 7,450 flats were sold.
Demand outstrips supply
A year-on-year increase in sales of a remarkable 80% (from 4,000 flats in 2023 to 7,200 flats in 2024) shows that demand for owner-occupied and investment housing is growing rapidly. Supply, however, is stagnating. The result is a market situation in which developers’ sales catalogues cannot keep up with the strong interest of clients, which is pushing the prices of new flats sharply upwards. This trend mirrors the mortgage market, where the volume of new loans rose by 83% year on year. High mortgage interest rates held back the property market in recent years. Their decline during 2024 encouraged buyers who had often been postponing their decision for several years to go ahead with a purchase. And that became the main driver of the growth in demand for new housing.
Experts expect that a continuing fall in interest rates could push demand for new housing even higher in 2025
Prague is expensive
Hand in hand with rising demand come rising figures on the price tags of new flats. Last year, prices in the capital reached an all-time high. The average selling price rose by 10% year on year to 156,851 Kč/m². The average asking price increased by 7% to 163,203 Kč/m². Both indicators exceeded the Czech National Bank’s forecasts for 2024 and hit their highest levels to date. The lowest price per square metre can be found in flats located in Prague 9 and 10. In these districts, average prices hover around 150,000 Kč/m². By contrast, the most expensive flats have long been in the historic centre of the city. In Prague 1 and 2, buyers need to be ready for sums exceeding 200,000 Kč/m².
The most dramatic price growth, 21% year on year, was recorded by new flats in Prague 3. Several large projects are being built in Žižkov and interest in living there is high
The higher price level reflects the rising costs of construction work and materials. Another factor was the addition of new, often premium, projects to the sales offer and the reduction in developers’ special offers last year. Factors that significantly dampen construction in the Czech Republic also include the complicated and time-consuming permit process.
Smaller flats win out
Of total new property sales, 75% were units with 1+kk and 2+kk layouts. Demand for compact flats has long been the strongest in the capital and the past twelve months were no exception. At the end of 2024, 5,700 new flats were available on the market. Supply has held at similar levels for the past two years. According to data from the Czech Statistical Office, construction began on a total of 8,191 flats in Prague last year, 6,967 of them in new apartment buildings. While these figures show significant year-on-year growth, this is mainly due to the sporadic construction in 2023. Experts agree that meeting demand would require building at least 10,000 flats a year in the capital. Although housing in the capital is becoming less and less affordable for people with average or slightly above-average incomes, it is likely that the current trends will continue this year too. Flat prices will therefore keep rising and strong interest in buying new property will persist. FLAT SERVICE provides a comprehensive service in the field of investment property in Prague and the surrounding area. Thanks to our professional management, our clients have no worries about renting out a vacant flat – we take care of everything from selecting a suitable tenant through ongoing checks on the condition of the home to taking the flat back once the lease ends. Our experts will be happy to introduce you to our Partner and Garant services; simply write to sales@flatservice.cz or call +420 277 000 330.
