Now the average cost of a new apartment in the Czech capital is € 4,520 per sq.m.
What happened? According to Deloitte, prices for new buildings in Prague have increased by 81% over the past six years. Analysts are confident that the lengthy legislative process for approving new construction has played a major role in this, writes Prague Morning.
Quote… “Unfortunately, we have very poor building standards, the construction of new apartments takes a very long time, and this leads to an inadequate response from the supply side in the real estate market. This deficit led to a sharp jump in prices, ”says Stepan Krzeczek, senior economist at BH Securities.
According to Deloitte real estate expert Petr Han, a new project in Prague takes an average of nine years. He believes that the situation began to drag on since the crisis of 2014, after which interest in housing has grown, and since then supply has not kept pace with demand.
“Apartments have become a classic investment opportunity due to the steady rise in prices, which further increases demand,” adds Stepan Krzecz.
Another reason. Along with the numerous administrative restrictions imposed on potential new housing projects in Prague, the situation on the short-term rental market is also driving up housing prices. With the growing popularity of Prague among foreign tourists, the use of services such as Airbnb is growing.
Perspectives… Petr Khana believes that the rise in prices in the future should continue, but we can expect a slowdown in its pace. Stepan Krzeczek agrees with this and claims that real estate will continue to rise in price.
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