New figures published by the audit, analytics and advisory firm Deloitte – which together with PwC, E&Y and KPMG belongs to the so-called “Big Four” (BIG 4) – show that in the second quarter apartment prices in the Czech Republic again exceeded 100,000 Kč/m2 and, to be precise, settled at 101,700 Kč.
Back to the past
After years of cautious waiting, this price tag is therefore back above the level where the market stood just before Russian troops invaded Ukraine. That invasion triggered the energy crisis and set off a wave of inflation, when this key economic indicator ran in double digits. Importantly, this is not the so-called asking price – the one sellers and real estate agencies publish in their listings and which is often somewhat detached from reality. On the contrary, it is the achieved price, which is a far better indicator of the overall situation on the property market.
How high will apartment prices in Prague go? Analysts are not entirely sure, but a growing share of properties immediately appears on the rental housing market
In the capital, of course, the hundred-thousand mark fell long ago, and it is this Central European metropolis that has been pushing the national average up for years. Property here now sells for an average of more than 130 thousand crowns per square metre.
Where is demand for housing highest?
One of the leaders is Prague 7, where a whole range of interesting residential projects with high added value are currently under way, which may also be attractive to private and institutional investors. They include, for example, the conversion of the former Tesla Holešovice site into the new So-Ho residential complex (short for South Holešovice), the ZigZag Haus residential block in the neighbourhood known as Little Berlin, and others. Achieved sale prices here have approached 150 thousand crowns per square metre.
Holešovice and Letná are in demand, and not only thanks to their cosmopolitan character and interesting range of apartments
A marked price increase was recorded in the Plzeň Region, where residents benefit from an attractive location and good transport links to Prague as well as to major cities in Germany. In the Karlovy Vary Region, by contrast, prices fell slightly, which is very likely linked to the outflow of foreign capital from the region. Politicians and relevant organisations point to the region’s structural problems, including the absence of a university. Achieved prices on the primary market for new developments also influence actual prices on the secondary market, i.e. sales of apartments in older tenement or prefab buildings. Given the renewed growth in labour costs and building material prices, there is no reason to expect this trend to reverse any time soon.
Towns where demand for housing is growing fastest include Kolín in Central Bohemia
Investing in property? Time is ticking…
If you are considering buying an investment property right now, it is worth looking at what both the primary and secondary markets have to offer and keeping an eye on price developments over the coming months. Besides Prague, attractive locations may include apartments in smaller towns with good rail connections to the capital. Buyers therefore often end up choosing a property in Úvaly, Český Brod, Kolín or even Pardubice, where they will find the comfort of a regional capital just an hour from the centre of Prague. Do you have an apartment in Prague in your portfolio, or are you planning to buy one? And would you like the tenant selection and all the related paperwork to be handled without any worries? Then be sure to take a look at the FLAT SERVICE Partner and Garant services. We are ready to provide you with complete service from A to Z, saving you both time and money. Just write to sales@flatservice.cz or call +420 277 000 330 and arrange a meeting.
