Apartment construction in Prague is slowing down
According to Radio Prague, the greatest demand is for small apartments, which are more affordable in price. In this case, demand significantly exceeds supply. The queue, however, is small – up to 9 applicants per apartment, but time for deliberation is very limited – no more than three days before the first deposit is paid. If a 'hot' applicant hesitates or unforeseen circumstances arise that hinder the rapid implementation of their financing plan (most often involving mortgage loans), the developer begins negotiations with the next buyer in line.
Current data from the Czech Statistical Office indicates that the volume of housing construction in Prague is declining. During the first half of 2016, construction of only 522 new apartments began in the Czech capital. This is 80% less than in the same period last year. The slowdown in new projects is often blamed on government agencies issuing building permits. On average, it takes 8 years from the time a company acquires the necessary land for a residential building until the project is completed, notes, for example, the owner of the development company Central Group, Dušan Kunovský.
The total number of new apartments currently for sale in Prague is also decreasing. At the end of 2015, buyers could choose from 7,000 apartments of various types, while at the end of the first half of 2016, there were only 4,650. The total number of actively marketed development projects decreased by 38% compared to last year, and now there are only 246.
The decrease in supply and the availability of mortgage loans for citizens (interest rates are at a minimum) lead to an increase in housing prices. Compared to June of last year, the price of new apartments in Prague rose by 18.7%.