Increased demand for apartments in Prague may lead to a rise in real estate prices
In 2015, construction began on 3,949 new apartments in Prague, which is 8.9% more than in the same period of 2014. According to Radio Prague, these figures were released by the Czech Statistical Office.
"According to our estimates, over the same period, developers sold 6,500 apartments, which is two-thirds more than the number that began construction," said Dušan Kunovský, chairman of the Central Group representative office. According to his calculations, apartment sales in Prague grew by 15% in 2015, and a further 10% increase is expected in 2016. "If such high demand is not soon met with a similar speed in issuing building permits, demand will exceed supply, and real estate prices will rise," Kunovský emphasizes.
According to the aggregate statistics of companies Ekospol, Skanska Reality and Trigema, a record number of apartments – 7,000 units – were sold in the capital in 2015, which is 77% more than the number of new constructions started. According to Evžen Korec, director of Ekospol, the lengthy construction process is due to an unjustifiably complex building permit procedure, which has no equivalent in any EU country. "The three-stage permit process is a Czech peculiarity that is yet another proof of the absurd legislative process prevailing in the Czech Republic. The problem is not only the incredibly long timelines, which the authorities often do not adhere to, but also the possibility for anyone to criticize any construction intentions, thereby further delaying project implementation. The opportunity to comment on projects should be given only to professional circles, not as it is now, where essentially anyone from the other end of the country can do so," explains Evžen Korec.
In his opinion, the situation in Prague is exacerbated by the chaos that has been prevailing in zoning for several years. And this is not only about the so-called Prague Building Regulations – the problem also lies in the fact that the capital lacks an updated territorial plan, which should have been approved back in 2010.
Developers are confident that demand for apartments in Prague will continue to grow, thanks to thousands of people from the regions and abroad who come to the Czech capital to earn a living. Therefore, new sites for apartment construction need to be allocated, which has not yet happened.