Analysis: A luxury one-hundred-meter apartment in Prague will cost an average of 155,000 per m2
Update: 14/07/2022 15:09
Issued by: 14/07/2022, 15:09
Prague – The prices of new luxury apartments in Prague rose by 9.8 percent in the first half of the year. According to the analysis of real estate agency Svoboda & Williams, the average price per square meter of an apartment of more than 100 meters in the capital was 155,014 crowns, but the interest in high-quality residences will drop by 17.3 percent. The amount of luxury rents on average increased by 14 percent to 34,450 crowns per month. The company said in a press release.
Real estate agency Svoboda & Williams stated that on average, a permanent premium apartment with an area of 102 square meters costs almost 14.5 million crowns. The most expensive are luxury apartments in the center of Prague 1, where the average price per square meter reached 193,550 crowns. In Prague 10, you can buy a premium property with an average price of CZK 127,851 per square meter. Most luxury apartments were purchased by Czech clients in the first half of the year, who accounted for 76 percent of buyers.
The 14 percent year-on-year increase in rental housing prices by 5.2 percent exceeded average prices before the coronavirus pandemic, according to the bureau. Most of the properties were rented by foreigners, who in the highest segment above 55 thousand crowns per month made up 69 percent of tenants.
According to the company, the decline in demand has not yet been reflected in the volume of realized sales. However, due to the war in Ukraine and rising inflation, the company expects the market to stagnate or correct. “Which offers investors a number of opportunities. A temporary slowdown always improves the offer, so in recent months we have also observed that more interesting properties are beginning to appear on the market at this stage,” said Prokop Svoboda, managing partner of Svoboda & Williams.
Svoboda expects that current developments will accelerate the transition of this segment to the euro. “I would not be surprised if residential developers start publishing their price lists in the single European currency next year and recalculate them to crowns according to the current exchange rate,” said Svoboda. He pointed out that in the office market, lease contracts in euros have long been standard.
In recent decades, Prague has practically not built municipal apartments. There are now a total of about 30,000 apartments owned by the municipality and managed by the city districts, out of the original number of 194,000, which after 1991 became the property of the city. The majority of self-governed apartments were sold to tenants during privatization.
According to data from the Czech Statistical Office (ČSÚ), all housing construction in the metropolis ranged from 2010 to roughly between 3,000 and 5,000 housing starts per year. According to the CZSO, the construction of about 9,700 apartments started in 2018, which was the most since 1997. This trend is likely to continue – according to the data for the first construction this year, 1,935 apartments were started in Prague, which was about 56 percent more than in the same period last year.