According to the strategic plan, Prague needs an annual construction of about six thousand to satisfy the new plan to assemble the population of the metropolis. At the same time, it should restore at least a percentage of its housing stock.
According to Deloitte, 900 projects with approximately 40,000 apartments are currently waiting in the permitting process. According to the Czech Chamber of Commerce, this situation is not only to blame for complex legislation, but also for its misuse for obstruction. The flats now on sale come from applications submitted between 2010 and 2014.
“It is precisely this alarming number of ‘frozen’ flats in various stages of approval that is primarily behind the extreme price increases in recent years. Chamber of the Czech Republic Vladimír Dlouhý. According to him, this is not a real estate bubble, but a real shortage of new apartments on the market.
The disparity between the given applications and the building permits issued arises due to delays against the legal deadlines at each level of the permitting process. According to Deloitte, processing permits takes an average of 245 days in the Czech Republic, which ranks the country 166th out of 185 monitored countries. In leading Denmark, the process takes 64 days.
The length of preparation of housing projects in Prague takes at least 4.5 years, but often it reaches up to seven years. The implementation itself will then take another two years. “The number of newly started flats in Prague at the end of 2016 was 2758, in 2017 we expect another, when the construction of 1633 flats was started in the middle of the year. While at the end of 2016 6092 new flats were completed, in the middle of 2017 it was only 2947 , while the trend is declining, “said Michal Melč from Deloitte.
According to Dlouhý, speeding up the procedure at all levels of the permitting process can be partially helped immediately, before the change in legislation. “However, it requires consistent application and compliance with deadlines for decision-making. Developers and investors have been drawing attention to this fact for a long time,” said Dlouhý.