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News Release

Prague

The number of completed apartments and apartments under construction in Prague grows


​Prague, 4 June 2014 – In 2013, the trend of subdued new development continued with only 3,620 apartments in 59 projects being commenced in Prague. This represents an approximate 13% decline compared to 2012. For 2014, approximately 4,000 apartments are planned to be commenced. From a location perspective, the strongest new supply in 2013 was recorded in the following five sub-markets: Horní Měcholupy, Zličín, Modřany, Kyje and in Smíchov. These five sub-markets continue to dominate the residential market in terms of sales volumes, largely due to the number of mufti-phased, long-term projects of the larger developers.

The largest number of sold units consisted mainly of small apartments. We recorded the share of small, up to 2kk, apartment sales at almost 66%. At the same time, the trend of a slow price increase of new, as well as older apartments, has been confirmed.

New apartment units in Prague

In 2013, after several consecutive periods of a steady decline in the number of available apartments in projects, the volume of available units once again increased from 6,066 apartments available on the market in July to 6,391 units in December. 

“Although the total number of completed apartment units and units under construction is increasing, it still remains low. For 2014, the completion of 4,500 new apartments is planned, which is only just over a half of the peak year of  2010 when the total supply of apartments to the market amounted to 8,500,” says Iva Nováková, Head of Residential Agency at JLL.  

Price levels and loan market trends 

The average prices of apartments started to grow slowly over the last quarter of 2013, mainly due to the expected change of VAT for land plots. Despite minor swings caused by the changing structure of supply, this trend has continued in 2014. ‘’In 2013, Fincentrum Hypoindex recorded a record volume of loans, amounting to CZK 156.1 billion of mortgages, which exceeded the high levels of 2007. This increase was also caused by low interest of mortgages. In 2014, we expect the slow increase of prices to continue and the number of new apartments to grow,“ adds Iva Nováková.