Development of real estate market in the first quarter of 2022
Real estate prices in the Czech Republic continued to grow rapidly in the first quarter of this year. The average price on the market of resale flats reached 130 000 Czech crowns per square meter, while the price of new build properties reached a record 167 000 Czech crowns per square meter.
According to the owner of the Trigema development company, in addition to high demand, the significant price increase is also due to the price of building materials and uncertainty about the future prices of building materials and labor. Developers' risks have increased, which is also causing prices to rise. Despite this, real estate continues to be seen as a great investment opportunity and a safe way to store savings.
During the first quarter, construction started on 1 935 apartments, 85% of which are under new construction and 15% under renovation. This is a record number of new apartments under construction since 2008. Year-on-year growth in dwellings under construction is 56%, compared to the first quarter of 2021. Even though the housing stock is growing, demand is significantly higher than supply. The number of completions in the period was just over 1 300 dwellings. Notwithstanding the record number of housing starts, the number of completions during the first quarter was significantly lower year-on-year in 2021 - by 22.9%.
The record number of apartments sold caused a very low supply of vacant apartments in Prague at the beginning of this year. At the end of the first quarter, the number of vacant apartments increased slightly to 3 200 units. According to the CEO of Skanska Reality, the supply of vacant apartments would have to triple to meet the long-term needs of the market.
