According to an analysis by Central Group, Trigema and Skanska, it sold 2,650 new apartments in the second quarter of this year, the largest in history. On the contrary, the number of offered units was historically the smallest, it decreased to 3,350 flats.
“Women’s demand is still a very affordable mortgage and also fear of devaluation of savings due to inflation. Queues are even being created for flats, and new projects will be sold out for the most part Practically immediately after launch. Let the sale most likely await us for the most successful year, “says Dušan Kunovský, the founder and head of Central Group, about the market situation.
The former luxury is now average
Compared to the same period in the previous year, supply fell by twenty percent in the first three months of this year, and the decline was even greater in the second quarter. The number of offered flats fell by forty percent compared to last year. On the contrary, interest in buying new flats has increased extremely. Sales increased by 140 percent from April to June compared to 2020.
A total of 4,750 new flats were sold in the first half of this year, which is almost double compared to last year. According to the analysis of development companies, a record 2,650 flats sold in the second quarter mean that people bought 550 units more than at the beginning of the year, when they invested in 2,100 new properties.
“An above-average number of new flats went on sale, but even so, the huge interest of buyers was able to reduce the offer to a historic low. In order not to remotely distort the new housing market, a balance must be struck between supply and demand. Therefore, we recommend calling for faster permitting of new construction. If this situation should continue, it may be reflected in the price and quality of future offers, “but Petr Michálek, CEO of Skanska Reality.
The differences between supply and demand are reflected in the expectations of individual apartments, which are rising. At the end of June, only 5 percent of the units offered at a price below CZK 100,000 per square meter were on the market. This means that 95 percent of apartments on the sellers’ market are offered at a price that symbolized imaginary luxury five years ago.
The growth is also evident on the average supply days of vacant new units. In the last quarter, they rose sharply by more than 15 percent compared to last year, to 129 thousand crowns per square meter.
The number of apartments will fall again
The constantly rising housing prices further deepen the Prague housing crisis. According to the lecturer of the MBARE program and the real estate market expert David Mazáček from the University of Economics, it does not seem that the prices of flats have started to fall, although no longer so in demand.
“I think the demand boom will subside, but supply will not increase. Rather, it will decrease again year-on-year for buildings that are suitable for normal clients, ”says the expert.
“Price growth will continue, but with rising inflation, it will approach the inflation rate in the medium term. Because if we have an average apartment price of around 125,000 per square meter this year, the number of people who have it honestly is declining, ”adds Mazáček.
The municipality is trying to solve the unhappy situation on the real estate market. He wants to provide residents with affordable housing in the form of city apartments. He therefore founded the Prague Development Company, which should arrange the construction. But residents will have to wait a long time for them.
“Massive urban housing construction in Prague is not yet underway. It is necessary to prepare projects, easy building permits and the like, it just takes some time. However, the Prague development company is working, “says Adam Zábranský (Pirates) in his statement on social networks.
But the crisis will not wait for the completion of city apartments, many people are looking for affordable housing.
According to the city management, the Municipal Rental Agency could help, which rents apartments from private owners, which it then offers to rent to people in need. During the first wave of collecting bids in June and July, the Municipal Rental Agency responded with an offer of around thirty owners. So far, a total of fifteen of them have been selected from the assessed flats.
According to the city’s plans, new residential units are also to be created after the reconstruction of the former Opatov Hotel in Prague 11 and thanks to the reconstruction of the Transport Company’s hostels, which are to buy the city from the company. After the reconstruction, 175 flats should be built there.
How to solve housing according to the leaders to run in Prague?
- Olga Richterová (Pirates and Mayors / Pirates): The unavailability of housing in Prague is a complex problem that cannot be solved overnight. The most important thing is certainly to build more in Prague, but the construction will also cripple the unfinished building law prepared by developers for several years, which the government pushed despite criticism of Prague. We need to fix it and give powers back to local governments – instead of one mega-office proposed by Babiš, which will not speed things up. Construction management must digitize in order to speed up. We will set the conditions for negotiations with developers on the state of affordable housing and also on investments in civic amenities in the form of kindergartens or parks. Prague must also endure Airbnb, where these hotels occupy up to 12,000 apartments in Prague without rules. At the same time, Prague must continue to repair the housing stock. Nonsensical standards that prevent housing or studios from being approved for living must be abolished. It is also necessary to convert historic and industrial buildings into apartments, not just offices and shopping centers.
- Patrik Nacher (YES): At the municipal level, it is about the will of the Prague coalition to release construction in brownfields and development areas, negotiate with developers on planning contracts, in which the developer’s commitment would be to sell cities at a cost for a certain percentage of small flats. At the national level, it is about legislation, about officials, about bureaucracy, so that the construction of an apartment building in the 21st century does not take longer with all the stamps than the construction of a monastery in the thirteenth century. Overall, it’s about strengthening that supply side. If, in the long run, demand exceeds supply, as has happened in recent years, logical real estate prices rise. I am therefore pleased that a revolutionary building law is being used to enforce this term, which will speed up and simplify construction. Finally, the long-awaited investments not only in housing construction can start in the Czech Republic. For example, thousands of flats will be built in Prague, which have been waiting for permission for more than five years.
- Jana Malacova (CSSD): Having a roof over your head must be a matter of course. From the CSSD’s point of view, this is one of the basic life guarantees. However, the level of housing unavailability has already gone so far that it is necessary to start a housing revolution as soon as possible. The state must necessarily enter the housing market. We will establish the State Fund for Affordable Housing. We will start building and buying finished flats from development projects from it. We will then rent them to seniors, young people, single women or state employees at lower prices. We see another source of housing in half-empty hotels. We would buy them and turn them into apartment buildings with start-up apartments for young families or small apartments for the elderly. Last but not least, we will tax speculators, adjust the construction of cooperative flats and limit the short-term rental of flats for tourists via Airbnb.
- Markéta Pekarová Adamová (TOTAL / TOP 09): We don’t want to drown people in bureaucracy. We will want to amend the building law as soon as possible so that it does not contain the nonsense and remnants of the current government, such as the newly introduced super-office. We want local governments to decide on construction, not a remote bureaucratic structure. We mainly intend to help young families not only in Prague. One of the recipes may be the introduction of an interest-free loan to repay a ten percent mortgage on the first home. Prague and other cities deserve the use of brownfields.
- Josef Nerusil (SPD): The inaccessibility of housing is one of the biggest obstacles to family policy and I dare say that it is also one of the biggest barriers to the social cohesion of the population. The privatization of the city and municipal housing stock has not been considered in this respect; the city districts are better placed to ensure that the privatized housing is actually used for housing, thus gradually transforming it into offices or short-term accommodation for tourists. The SPD proposes to support and legislatively simplify cooperative construction, which should be supplemented by a guarantee for loans to families who do not own any other real estate. Our intention is to support people’s housing, not further speculation by housing developers and dealers.
- Marta Semelová (KSČM): Housing in Prague is very expensive – apartment prices, rents, housing costs in general. Housing construction is stagnating, many of the newly built flats have already been bought by speculators as investment for their profit. On the other hand, there are a number of long-term empty apartments. The KSČM will present a state program for the construction of state, municipal and cooperative flats – it is realistic to build 40,000 flats a year, of which 5,000 are cooperative with the participation of cities. We will reduce rents in municipal flats, we need to put pressure on this way to reduce excessive rents in other flats. We will provide tax relief, for example for home insulation and preferential or non-repayable loans to young families for the purchase of an apartment and its equipment. We will tax dealing with apartments, which means that we will introduce a progressive tax on second and other real estate intended for permanent housing, but it is used only for the profit of the owners, and a tax on unused building land.
- Zuzana Majerová Zahradníková (Tricolor Free Privateers): It’s not just Prague’s pain and of course there are more of those problems, and only their sum drives the prices up. So only in speed and naming: the developer is not a bad word, the length of the construction procedure is unbearably long in our country, the construction of apartment buildings must pay off for the private sector. It is not possible to create a bureaucratic barrier and then try to break it through another bureaucracy. Let’s give people more freedom, they can handle it.
- Jiří Hynek (Oath): Affordable housing is becoming something difficult to achieve, especially in Prague. In addition, housing costs and rents are constantly rising, and unfortunately twice as fast as wages. Which is unsustainable in the long run. The construction of municipal flats will contribute to resolving the situation. Municipalities would build start-up flats, especially for people with professions that are needed in the area. For example, for medical staff, teachers and the like. Another decision is that the municipality or the state will support cooperative flats. These are possible ways to make affordable and decent housing accessible to more citizens. Especially for those who benefit society.
MF DNES selected the addressed parties on the basis of a public opinion poll in July 2021, from which eight candidates with the greatest electoral potential emerged.