Last year, the Czech Republic broke a record in apartment construction. According to calculations by the Statistical Authority Department, more than 45,000 flats were built, i.e. 10,000 more than a year earlier. In Prague, the number of constructions has risen from three and a half to nine thousand. Unfortunately, the current, albeit faster, pace of construction is not sufficient to meet the strong demand contributing to rising housing prices.
Acceleration of the construction process not in sight
According to experts and recent survey studies construction processes should be more efficient in speed however are still dragging on and are not sight. Such a systematic change would be hugely welcomed by developers. The current increase in new housing under construction can only be explained by the approvals developers have received for multi-unit residences.
Extremely high real estate prices have been plaguing the Czech market for a long time. Apartments have become an investment not only for the ordinary people to protect their savings against inflation, but also for real estate fund organisations investing predominantly until recently into industrial or commercial properties. This interest of investors and common people in buying flats has created a disbalance between demand and supply.
Flats in big cities insanely expensive
Flats in big cities have become so expensive that only people with high salaries can afford such investment. At present time, in Prague the price per square meter is around czk 144,000 and in Brno, at the end of the year, flats were sold for an average of CZK 124,500 per square meter. Demand to buy is expected to weaken over the next three years due to more expensive mortgages. To ensure the decrease in apartments’ sale prices already mentioned system changes are believed would significantly help.
The existing coalition of ODS, STAN, KDU-ČSL, TOP 09 and Pirates disagrees with the new construction law of the last year's government and aims to rewrite it and postpone its entry into force until July 2024. The new government plans to abolish the Supreme Construction Office and give more powers in land-use planning to municipal offices. Officials say this change will provide the benefit of speeding up a permit to build.