The listing prices for new-build apartments in Prague have, for the first time, surpassed 160,000 crowns per square metre. Since the start of the year, they have risen by 5.4%, exceeding the growth forecast by the Czech National Bank for the whole year. Prices for older apartments and rents have also increased, according to an analysis by Central Group, Trigema, and Skanska Residential.
New-build property prices in Prague have been rising for four consecutive quarters. At the end of September, they reached 160,720 crowns per square metre, surpassing previous highs. Compared to last year, property prices have risen by nearly 7%, with more than a 5% increase since the beginning of this year. By the end of the third quarter, price growth for new-builds had already exceeded the growth rate anticipated by the Czech National Bank (ČNB) in its financial stability report for the year.
“Demand for new apartments has risen sharply this year and is currently about a third higher than before the pandemic, despite mortgage rates not falling as quickly as expected. Supply can’t keep up with the increased demand, which is why prices are rising faster than anticipated,” explains Ondřej Šťastný, Chief Analyst at Central Group.
Not only have new-builds become more expensive; a shortage of housing and high demand are also driving up prices for older apartments and rents. According to data from the sreality.cz portal, the average price of older apartments in Prague has already reached 132,604 crowns per square metre, reflecting a 12% year-on-year increase. Similarly, the average rent in the capital rose by 7% compared to last year, reaching 436 crowns per square metre.
Highest price increases in Prague 3; Prague 9 remains the most affordable
Prague 9 remains the most affordable district in Prague, with new-build prices close to 146,000 crowns per square metre. This area also has the largest housing supply in the entire city. Due to extensive new development projects on former brownfield sites, Prague 9 has long been considered the most dynamic district in terms of construction.
“A larger volume of construction allows for lower prices, supported by a competitive environment. It’s no surprise, then, that most apartments are sold here over the long term. In our Tesla Hloubětín project, nearly 300 apartments have been sold this year alone due to the attractive prices, making it the best-selling project in Prague according to statistics,” adds Šťastný.
The most expensive districts remain Prague 1 and Prague 2, yet Prague 7 is also catching up, with listing prices there now exceeding 200,000 crowns per square metre. These three districts are characterised by a limited supply, often focused on smaller, more exclusive projects. The highest annual price increase was seen in Prague 3, at over 16%.
Since the beginning of the year, 5,350 new-build apartments have been sold in Prague, and by the end of the year, 7,000 to 7,500 apartments are expected to have new owners – a level close to the record year of 2021. Demand is expected to grow further with additional interest rate cuts, putting further pressure on prices. Another factor could intensify the increase: the ending of deferred development projects.
“This year, a record number of apartments has come onto the market – over 6,000 since the start of the year. Many of these come from projects that had delayed starts over the past two years due to lower demand, expensive credit financing, and high construction costs. However, these projects will soon be exhausted. If approval processes are not expedited, property prices could rise even faster. Anyone planning to buy a new apartment shouldn’t wait too long,” concludes Šťastný.
