Housing price trends in Prague
In the fourth quarter of 2022, the average price of non-newly built flats in Prague returned to the same level as at the end of 2021. A flat of 65 m2, located in the centre of the capital in a broad sense, cost approximately 112,500 Czech crowns per m2 at the end of the year. These figures are those reported by a study by the real estate industry group European Housing Services (EHS), which uses data from its founding members (Bezrealitki and Maxima Reality). A similar price trend was recorded in Brno, where the same type of flat recently fell to 87.902 crowns per square metre. As for newly built apartments, the average selling price in Prague increased by 9.9% in one year. At the end of 2022, one m2 cost an average of 151.643 Czech crowns (13.397 crowns more in one year), according to an analysis jointly carried out by Skanska Residential, Trigema and Central Group, the 3 leading development companies. Last year, 3100 new flats were sold in Prague, a decrease of approximately 60% compared to the record in 2021.
The total sales value reached 28 billion crowns, a yearly decrease of 51%. Real estate development companies are hoping for a strong spring market and are unwilling to reduce prices, also because of the cost increases they have experienced. They trust in a spring drop in mortgage interest rates, which they see as the main brake. The newspaper speaks of a Prague property market at a crossroads. Nevertheless, for those who are hunting for opportunities in the real estate sector, the current period could prove to be a very propitious one. There is talk of reductions of up to a third and more in the case of houses that have not been built recently and in locations that are not particularly attractive. This is highlighted today by the newspaper E15, according to which there will be an increase in the number of those who want to sell quickly and are therefore willing to offer very favourable discounts, especially to buyers with ready cash. Real estate market experts, however, believe that the downward trend in house prices is episodic and may end as early as the end of this year. According to the price trend scenarios of the CNB’s Financial Stability Department, the decline in brick prices will ultimately not be dramatic. The message from the CNB is: ‘don’t expect 20% discounts to buy a house’. It is therefore possible that prices will recover as early as the end of this year.
Resources E15, Aktualne, Inhed
