Developers are reacting to the changing market, where the demand for rental housing is growing significantly, especially due to the hiking interest rates.
Last year, developers sold 2,400 new apartments in Prague, which is the lowest in the last 20 years. An analysis by the property developer Ekospol shows a year-on-year drop in sales in the capital of up to 62.8 percent. Expensive and unaffordable mortgages and the uncertain economic situation have hit the market for new flats in Prague. In addition to expensive mortgages, the reintroduction of stricter requirements for assessing mortgage applicants has also had a major impact.
However, price increases have slowed down. Prices of new flats on the Prague market have peaked and will instead stagnant Ekospol's CEO estimates. ČSOB analysts also estimate 2023 as a period of continued market stabilization. Inflation seems to have peaked and its rate will gradually decline.
Developers no longer routinely sell all housing units to individual customers. They are allocating some of the new units to tenants. One of the reasons for this is also due to the fact that over the last fifteen years, many even domestic real estate development companies have become so capital strong that they can afford to wait for longer returns.
More developers are considering building rental homes. In fact, some projects are now exclusively rental. For example, Afi Europe is building BTR projects and we have had the opportunity to lease more than half of the apartments on offer. It is also worth mentioning the exclusive cooperation with Well Group a.s., which has more than 3 projects of fully furnished apartment units in Prague for both short-term and long-term rental.
In addition to the sale and relocation of foreign students, our company is also an expert in BTR projects - renting out apartment units in large quantities. During our operations in the Czech Republic, we have acquired and leased a total of 53,000 sqm of rental housing.
Source: Idnes.cz a Asociace nájemního bydlení
