Prague 4 and Prague 9 saw the biggest number of new flat sales during the first three quarters of 2021, according to Flat Zone, with around 240 having been sold in each. They made up roughly 17% of the market, according to the residential analyst. It adds that, not surprisingly, the most expensive new units were on offer in Prague 1 and Prague 2, with prices exceeding CZK 160,000 per square meter (including VAT). Prague 9 and Prague 10 offered the cheapest average prices for new flats (under CZK 120,000 per sqm). It’s going to be interesting to watch if the pace of residential price rises slows down, following the Czech National Bank’s shocking interest raise hike at the beginning of November.
Prague’s residential sector is in crisis in other ways, as the number of units currently available is at an all-time low. Essentially, the city is running out of new apartments, with just 2,750 on offer by developers. That’s a 50% reduction from the same time last year. The ČNB is meeting today, and it’s expected to discuss tightening restrictions on mortgage conditions. That could be a blow for over-extended investors counting on price rises of apartments. Central bankers believe the residential market is around 18% over-valued.
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