The Czech construction industry experienced another challenging year, with production falling by 2.4 percent in 2024, mirroring the decline seen in 2023. This marks a second consecutive year of downturn, primarily driven by a slowdown in building construction. However, December brought a glimmer of hope with a surprising 9.7 percent year-on-year growth, up from November’s 2.5 percent.
In a significant development, while housing starts showed a modest increase with 36,000 new units initiated in 2024 (up 2.2 percent), the number of completed homes dropped dramatically by one-fifth to 30,000 units. Prague, Central Bohemia, and South Moravia led the country in both new construction starts and completions.
Industry experts point to multiple challenges facing the sector. According to Ondřej Boreš from Velux, the housing market remains frozen due to high mortgage rates, rising living costs, and slow building permit processes. These factors particularly affect younger generations’ access to housing.
The situation is further complicated by an aging housing stock, with the average age of Czech residential buildings exceeding 40 years. Many residents are opting for renovations rather than new purchases as a more practical solution.
Despite these challenges, Creditas Bank’s chief economist Petr Dufek predicts continued growth in housing prices for the coming year, citing a mortgage market boom that’s driving demand while supply struggles to keep pace.