Interest in new flats in Prague remains high. Sales continue their upward trend, and the supply of vacant flats is gradually decreasing. As a result, the Prague housing market faces a shrinking stock of available properties, which, combined with other factors, is reflected in a further rise in prices.
The enormous interest in buying new flats in the Czech capital persists. In the first quarter of this year, 2,550 flats were sold—an increase of almost 60 per cent compared to the same period last year. The market thus recorded its most successful first quarter in the past 15 years. The last time there was more buyer interest was in the record quarter of 2021, when 2,650 new flats changed hands. This data comes from the latest market analysis by leading property development companies Trigema, Central Group, and Skanska Residential.
One of the main reasons for the increase in demand is the fall in mortgage interest rates. While the interest rate for new loans was 5.2 per cent in the previous year, it has now fallen to below 4.7 per cent. The mortgage market has recovered significantly since last year. In March of this year alone, banks and building societies granted loans with a total value of almost 33 billion crowns—an increase of 29 per cent compared to the previous month and even 80 per cent compared to March 2023.
The improved economic situation in the Czech Republic is also contributing to the increased demand. However, the uncertain development in international trade—particularly due to the unclear US customs policy and volatility on global stock markets—could have a negative impact in the future. Property has always been considered one of the most stable forms of investment, and its role as a safe haven becomes even more important in times of geopolitical tensions.
‘The Prague housing market has seen the strongest start to the year for at least 15 years,’ explains Dušan Kunovský, CEO of Central Group. ‘Demand is being fuelled by falling mortgage interest rates and fears of further increases in property prices. We also expect the turbulence on the stock markets to increase investor interest in residential property. In total, over 8,000 new flats could be sold in Prague this year—that would be an absolute record.’
Prices Reach Historic Highs
Prices for new flats in Prague rose again at the beginning of the year. The average asking price currently stands at 167,947 crowns per square metre—an increase of 10 per cent compared to the previous year. Actual sales prices even rose by 12.5 per cent to 159,778 crowns per square metre—both new records.
Most flats were sold in Prague 4, 5, 9, and 10. Small flats with one or two rooms are particularly popular, accounting for around 75 per cent of sales. In Prague 9, prices are currently around 147,000 crowns per square metre—while in the central locations of Prague 1, 2, and 7, prices are over 200,000 crowns.
Supply Cannot Keep Up with Demand
The supply of new flats in Prague is not keeping pace with the growing demand. Compared to the end of last year, the number of available units has fallen by more than six per cent to 5,350. The stock of already approved projects is largely exhausted, and new projects are only slowly coming onto the market due to delays in the approval process. According to the Czech Statistical Office (ČSÚ), the required 10,000 or more flats per year have never been approved in the past 20 years—the housing deficit is therefore growing continuously. Last year, a total of 8,191 flats were approved in Prague—a figure that cannot significantly alleviate the tight market situation.
