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The experts from JLL have conducted a comparative analysis of the real estate market condition in Prague for the second half of 2020. The results of the study are no longer surprising: the pandemic has only increased the demand of buyers, despite the declining number of offers. And although developers continue to bring new projects to the market, the overall pace of construction is gradually slowing down, which is reflected in the report. But about everything in order.
Over the past year, the construction of 5,180 apartments was started in terms of objects. Although against the background of the first half of the year, the decline was 15%. It is more likely that this is more determined by the timing of construction than by the crisis. However, in comparison with the average figures of 2015-2019, the decline is "only" 8%. Prague is not a very big city: in the conditions of a limited territory, the slowdown in the construction of new facilities can not be a surprise, especially in the conditions of a non-standard state of the world. The rest of the country has identical identical situation, although more sad: in 2020, 24.5% fewer new construction projects were started in the Czech Republic than in the previous year.
Experts remain optimistic and expect that in 2021, the number of objects under construction will grow to 5,600.
And translated into concrete figures, this is 5,280 apartments for the twentieth year. Do not worry, most of them were commissioned in the second half of the year (3,440 objects). This is an increase of 87% compared to the first half of the year! Based on the data, experts expect about 5,100 commissioned objects in 2021.
Last year was generally very successful for the Prague market in terms of sales. The increase for the second half of the year was 46% compared to the same periods for the last 2 years. If we talk about exact figures, 6070 residential properties were sold. And this is more apartments than were built in the whole year. It is most logical to blame the crisis, which caused a boom in real estate markets in almost all countries. First, people strive to save their savings and provide a safety cushion with the simplest and most affordable investment for everyone – real estate. Secondly, the Czech Republic became one of the countries that lowered the mortgage rate, which provoked a sharp increase in demand.
Due to the hype, the number of apartments available for pre-sale has decreased by more than half compared to the previous two years. 69% of the proposals for the second half of the year are objects under construction.
The leading district in terms of the number of commissioned properties was Prague-4, where 790 new apartments appeared, or 23% of the total number. Thanks to such an active pace, Prague-9 and its 20% of objects were moved to the second position. In 2020, Prague-8 distinguished itself: compared to the previous two years, the increase was 32%.
In terms of sales, the two leading districts swapped places: 26% of all sales in the second half of the year were made in the Prague-5 area, Prague-4 comes on the heels with its 18%. Almost half (46%) of all objects sold in the second half of the year are 1-bedroom apartments with big kitchens. In second place in popularity are studio apartments. They accounted for 21% of all sales. Apartments with 2 bedrooms became the third and accounted for 20% of sales for six months.
The most expensive area is the historical center of the city, which is typical for any European destination. A square meter here costs almost 5400 euros (according to data for the second half of the year). The cheapest area is Prague-9, where a square meter costs "only" 3255 euros. It became so because of lower demand: in the second half of 2020, there were more apartments available for purchase in this area.
| Average price per square meter in the districts of Prague: | |
|---|---|
| Prague-1 | 141 100 CZK |
| Prague-2 | 109 100 CZK |
| Prague-3 | 89 900 CZK |
| Prague-4 | 89 700 CZK |
| Prague-5 | 96 200 CZK |
| Prague-6 | 103 500 CZK |
| Prague-7 | 110 100 CZK |
| Prague-8 | 101 800 CZK |
| Prague-9 | 85 400 CZK |
| Prague-10 | 88 300 CZK |
Thanks to the high demand and despite the decline in the rate of housing output to the market, prices in the metropolitan region continue to grow. Back in 2017, the average price of a square was just over 70,000 CZK. Now a square meter of the capital's real estate costs 93,800 crowns (at the current exchange rate, about 3,600 euros). Most of the apartments are presented in the range from 80,000 to 100,000 CZK per meter, and it is 58% of all offers. The number of more expensive options has also increased by 24% of the offers are in the range of 100,000 to 120,000 CZK.
Real estate prices in the Czech Republic have not been standing still for a long time, they constantly grow both for new buildings and for secondary housing. The latter has risen by 13% since 2019. At the same time, rental rates in Prague have fallen significantly due to closed borders and restrictive measures.
