The property market is experiencing a significant shift after a two-year period dominated by buyers who were able to pressure developers into offering discounts due to their limited number. Now, property sellers are gaining the upper hand. Their strong position will enable them to increase prices this year, and the first developer has indicated that this will happen within a few weeks.
The price increase could affect projects on sale in May and June. These include apartments built in Prague’s Kbely and Malešice by the developer company Skanska Residential. Currently, prices for three-room apartments of just over 70 square meters in these areas are around eight million crowns. The new offer could be slightly more expensive than their previous stages or comparable projects in the past two years, meaning buyers could pay an estimated two hundred thousand crowns more.
The first quarter of this year was very strong, with about 1,600 new buildings sold in Prague. These figures, collected by Skanska in cooperation with other developers, Central Group and Trigema, indicate that the first three months of this new year were among the best in the last decade. Year-on-year, companies sold two and a half times more apartments.
Interest in new apartments is also reviving in regions outside of Prague. Developers reported 1,900 in the first quarter, a third more than from January to March of last year. The demand could further increase if mortgages become cheaper again. The renewed demand will collide with an offer limited by the recent cooling of construction activity, which, according to Cyrrus’s chief economist, Vít Hradil, will cause apartment prices to bounce back upwards during the rest of this year.
The selling price of new buildings has stopped falling. In Prague, it stabilized at about 142 thousand per square meter. The average 70 square meter apartment will cost about 9.9 million crowns. According to developers, new buildings should increase by about five percent this year, in a model case, by about half a million. The Czech National Bank also expects a similar increase for all Czech houses and apartments.