Prague residential prices have peaked. Or as the masters of the city’s resi market (Trigema, Central Group and Trigema) put it in their joint press release, they “stabilized” in the second quarter of the year. “The current average sales price of 145,783 per square meter is comparable to the first quarter, but it’s still 20% higher year-on-year.” They also write that sales of new flats fell in the second quarter by one-third to 950.
Perhaps the most interesting sentence in the announcement was this: “Despite the continued rise in prices for key inputs and the continue uncertainty over the future course of the construction market in a time of high inflation, prices for new Prague flats remained at their original levels.” They blamed the lack of supply for the high prices, a situation caused by the absurdist planning and permits process in the city. That hasn’t stopped people from paying the high prices until now, however. What’s changed is that mortgage rates are no longer being kept artificially low.
On the subject of planning…local elections are coming, and so it’s been interesting to watch the jockeying for position in Prague via Twitter. It will surprise exactly no one to the right of center that Prague’s current mayor Zdenek Hrib is calling for the new developer contributions to be raised. “Higher tariffs will mean more affordable flats in Prague!” he Tweets, striding purposely through what looks like either Pragovka or the Žižkov cargo station. “The contributions were just implemented in January, but the current situation is changing quickly and it’s necessary to react.” The mayor is from the Pirate party. Deputy mayor Petr Hlaváček reacted online by saying there’s no problem with the contributions themselves. “I just don’t think it’s wise to start messing around with the level of contributions at a time when the entire market is cooling off…much more important would be to make it possible to build cheaper by cancelling or limiting some of the regulations that make all residential projects just as expensive…” He listed the exaggerated requirements for garages and for double doors for bathrooms as unhelpful regulations that could be axed.
CTP has agreed an 18,500 sqm lease at CTPark Bor near the German border with Desenio Group, a leading European wall art provider from Sweden. It marks the company’s first distribution hub for European markets outside the Nordic region. The digital direct-to-consumer company is backed by the investment company Verdane and has been growing quickly. “Desenio has served the entire European continent from a single distribution center located in Sweden,” says CTP’s head of business development Jakub Kodr. “To support continued growth, the Group needed to streamline their logistics and distribution channels.” CTP custom-built the distribution center by redeveloping a hall originally intended for a specialized food processing plant. The 8-month project included the construction of a second floor in order to add an additional 13,000 sqm of space.
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