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News Release

Prague

Prague residential market in H1 2013

Jones Lang LaSalle issues its H1 2013 Prague Residential Pulse publication in connection with the launch of its new search tool homefinder.cz. This new web-tool offers a comprehensive and easy overview of all residential properties offered by Jones Lang.


​Prague, 19 September 2013 — 2,505 units were sold in new apartment buildings and villa houses in Prague in the first half of 2013; up by 20 % compared to H1 2012 (when 2,013 units were sold in Prague). The leading districts are Prague 9, Prague 5 and Prague 10, which altogether accounted for almost 1,900 sold apartments. Unsurprisingly, the majority of apartments were sold in the affordable housing segment where projects are mainly located on the outskirts of Prague such as Zličín (Prague 5), Horní Měcholupy (Prague 10), Stodůlky (Prague 5), Vysočany (Prague 9) and Kyje (Prague 9). The dominance of these locations has been apparent for the past few quarters and is driven by the current major development spots of the largest local developers.
 
As for the structure of sales, the majority came from small 1kk up to 2kk apartments. However, the share of small apartment sales has slightly decreased compared to last year. In H1 2013, we recorded the share of small apartment sales at 56%, compared to the 60% from the total sales in 2012. The market is also dominated by the sales of the cheapest projects, under CZK 45,000 per sqm, which for example last year accounted for over 65%.

Over the last three years, we have recorded a very rapid decline in the number of available apartments in projects. Whereas in 2010, the number of available units reached almost 9,000, there are currently only 6,066 units available. The number of available units decreased  by 15% during 2012  and by 7.5%in H1 2013.

Commenced and completed new units in Prague
In H1 2013, we have recorded the completion of 1,655 units in Prague. Compared to the previous year, this is an increase of 10%. In the same period of last year, only 1,224 apartments in 27 projects were commenced in Prague, which represents approximately the same result as last year but, with an apparent deficit of commenced units and sales statistics.
 
The trend of subdued new development therefore continues. For the second half of the year, ca. 3,800 apartments are planned to be commenced. However, the majority of them are not even in the pre-sales phase and therefore, we expect ca. 2,000 – 2,300 units to be commenced in H2 2013.
 
From a location perspective, the strongest new supply was recorded in Prague 10, Prague 5 and Prague 9. These three markets have recorded more than a 75% share of the total volume of commenced units. There were only two cadastral areas where more than 100 units were commenced in H1 2013 which are Smíchov (Prague 5) and Horní Měcholupy (Prague 10).

Currently, there are more than 5,400 apartments under construction in Prague, with completion expected mainly in 2013 and 2014. Once again Prague 9, Prague 10 and Prague 5 are dominating these statistics with almost 80% of the market.

Price levels of new apartments in Prague
The price level has been stabilising over the past few months and the minor fluctuations are caused by the constantly changing structure of the available supply, strong price competition among major developers and, also due to taxation changes on the market. At the moment, the average price of all new developments in Prague is at CZK 51,052 per sqm (excl. VAT). The range among the districts is obviously relatively wide and the district average price levels range from CZK 43,254 per sqm in Prague 9 to more than CZK 166,000 per sqm in the city centre. The differentiation among individual projects shows even wider gaps.

“The current market is mainly a market of strong domestic developers, who create the majority of the market volumes. Relatively stable prices and low mortgage rates have been key drivers to motivate people back in looking into residential properties as investment opportunities,“ adds Iva Nováková, Head of Residential Agency at Jones Lang LaSalle.
 
homefinder.cz
Server homefinder.cz offers quick search for residential properties offered by Jones Lang LaSalle using all important parameters such as location, disposition or price. It also brings regularly updated information on the residential market based on exclusive research reports and other research publications.