In its most recent report on the Czech residential market, Flat Zone provides further evidence of change in the Prague market, as the supply of flats in new projects fell in 13% from 5,700 in Q3 to 4,950 in Q4. On the other hand, the supply situation is roughly the same as it was in Q4 of 2020. In fact, demand increased, with the +2,000 new units being sold (up 52% q-o-q and 24% y-o-y) the biggest number in four years. Flat Zone notes that new build flats are selling for an average of CZK 107,877 per sqm, while the average offering price is CZK 116,866 per sqm. Perhaps the most fascinating aspect of this new study is that it suggests that the prices paid for flats in regional towns rose by 16% over the last year, while in Prague it was just 2%. Is that evidence that people are looking for flats elsewhere than in Prague? Or that people in the regional cities are rushing to buy flats before they become too expensive?
Meanwhile, retail agents are already scrambling to find tenants for the five Prague locations that the CrossCafe chain announced it was closing. The company has already pulled the cafes from its web pages, leaving it with 19 still in operation in other Czech towns. “The capital is at the moment the worst hit by the exodus of tourists, the absence of office workers and students who are our main guests,” the company wrote in a statement. “Current developments of the situation don’t indicate that the situation will change in the future in a way that would allow the Prague cafes and restaurants to return to the sales from 2019. Support from the government of the Czech Republic doesn’t come close to covering our expenses…”
The Czech Minister of Transportation Karel Havlíček signed a PPP contract with the French consortium DIVia on Monday for the construction of a 31.8 km section of the D4 motorway in Southern Bohemia between Mirotice and Haje. The minister is hoping the project will mark the first successful financing of such an infrastructure project through a Private Public Partnership agreement. Critics charge that the risks of the project going wrong are minimal and that the state could have borrowed the money more cheaply than the construction consortium. Construction of the motorway along with its maintenance for the next 28 years will cost the state CZK 32 billion. Proponents of PPP projects claim the deal makes sense in light of the country’s enormous post-Covid budget deficit.
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