Prague seeing shortage of flats on real estate market, says financial daily

The Czech Republic is facing a shortage of flats on the real estate market, according to financial daily Hospodářské noviny. Most acutely affected, the paper writes, is the Czech capital, where developers are running out of apartments on offer on the market. New construction projects, meanwhile, have been slow to get off the ground.

Photo: Kristýna MakováPhoto: Kristýna Maková The price of flats on sale in the Czech Republic late last year climbed to pre-global financial crisis levels and this year have continued to go up. Despite that, the demand for apartments is now also at a record high, Hospodářské noviny, not least because the number of available locations for sale are beginning to dry up. Real estate agencies reportedly have fewer deals on offer and the situation is said to be the most difficult in the Czech capital.

According to the paper, developers are running out of apartments to sell. The reason why homes have sold so well come down to several factors –advantageous mortgage deals, low interest, improved economic growth and growing consumer confidence and spending. Board chairman of Central Group Dušan Kunovský confirmed for the paper that if the trend continued unabated, soon there would be little left to sell. Michal Zadák, manager of the popular real estate portal Sreality confirmed for the daily a 23 percent drop in property compared to last Spring. According to real estate agents, the price of apartments or homes has gone up by an average of six or seven percent in the first quarter alone. In the Prague, where 60 to 70 percent of all flats are sold, the price could go up by to 10 percent year-on-year.

Last year, developers sold around 6,500 new flats but new projects over the same period slowed: less than 3,000 new apartments were added. The situation is reportedly similar in Brno, where fewer projects were also green-lighted.