Prague Real Estate Market: Residential Projects Restart After Cost Slowdown

Residential Construction in Prague Heading Toward a New Phase

The real estate market in Prague could enter a new phase as early as this autumn. After months of slowdown, Central Group – one of the country’s leading residential developers – plans to restart construction on housing projects that were suspended at the beginning of December. The decision is linked to trends in construction costs, which according to estimates could fall by at least 10% in the coming months. This is a long-awaited signal for the entire sector, which has been under pressure due to rising material and labor costs.

New Apartments in Prague: 2,000 Units Ready to Go

If market conditions allow, construction of around 2,000 new apartments in Prague could begin by the end of the year. The projects are already complete from a design perspective and are merely waiting for more favorable economic conditions to move forward. The suspension announced last December was not due to weak demand or liquidity issues, but rather to a price environment deemed unsustainable. According to the company, construction costs had reached levels that were too high to ensure balanced development.

Apartment Prices and Supply Shortages

Over the past ten years, prices of new apartments in Prague have risen by 170%, a figure that clearly illustrates the tensions in the local real estate market. Several structural factors lie behind this growth:

• slow issuance of building permits,
• a shortage of new housing on the market
• and a disproportionate increase in the prices of construction supplies.

These factors have contributed to reduced supply and pushed prices upward, making access to housing increasingly difficult, especially for middle-income households.

Strong Demand Despite Slower Construction Activity

The postponement of new construction projects has not, however, halted sales.

• In 2025, 1,200 apartments were sold: a record result that confirms continued strong demand for residential properties in Prague.
• At the same time, land has been purchased for the construction of more than 5,300 new housing units.
• Currently, around 3,200 apartments are already under construction, carried out by numerous contractors.

These figures show that the slowdown was a strategic choice rather than a sign of a sector in crisis.

New Models to Reduce Construction Costs

If the expected reduction in construction supply prices does not materialize, Central Group is ready to revise its operating model.

• Among the options under consideration is a shift from a system based on general contractors to direct construction management, assigning individual phases to specialized companies.
• Another possibility is the acquisition of a medium- or large-sized construction firm, allowing the company to internally control the entire production process.

These choices could significantly affect the future of residential construction in Prague and the evolution of real estate prices.

Source: Česke noviny