Prague supply of new residential falls to record low in Q2

Demand for new residential real estate in Prague refuses to abate but new figures for the second quarter suggest that supply is dwindling. Central Group writes that its analysis performed in conjunction with developers Trigema and Skanska found that 2,650 new units were sold during Q2 2021 (up 55) from Q1). However, the number of new units has fallen 3,350  the lowest figure since the companies began monitoring. Taken together with rising costs for construction materials, this has pushed prices for flats in new projects up to between CZK 118,480 and CZK 129,410 per square meter. A total of 4,750 new flats have been sold so far in 2021.

“Sales have been at record levels for nine consecutive months,” said Central Group boss Dušan Kunovský. “It’s being driven by extremely affordable mortgages and also by the fear that inflation will devalue savings. There are even beginning to be waiting lists for flats and new projects mostly sell out as soon as they put on the market.” He said that the most popular layout are 2-bedroom units, which currently make up 40% of the entire offering. They’re followed by flats with 3 bedrooms and by studios.

Skanska Reality’s director Petr Michálek said the pace of sales is unprecedented. “The number of new flats that went on sale was above average but despite that, the enormous interest from buyers managed to reduce the available supply to historic lows. In order to avoid further deformations on the new residential market, a new equilibrium between supply and demand has to be created. That’s why we continue to call for speeding up permissions for new construction.

“The lack of supply of new flats is unable to satisfy the level of demand, which is why the growth of prices for new flats in Prague has accelerated again to 10%,” says Marcel Soural, board chairman of the developer Trigema. “It’s highly probable that the growth of prices will continue for several more months.”

 

Also in ThePrime:

Alexander Rafajlovič (CA Immobilien): Offices remain key, but dynamic asset class

Savills: Prague offices dominate Q2 investments

 

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