New flats in Prague increasingly out of reach

Prague inhabitants with an average salary would have to work for nearly fifteen years for a flat of approximately seventy square metres, if they didn’t have any other expenses, suggests a study by the developer company Central group. Just a year ago, Praguers needed to work less than 14 years to acquire a flat, while in 2014 it was less than ten years.

Photo: Klára Stejskalová, Radio Prague International

According to data provided by developer companies Trigema, Skanska reality and Central group, an average flat of seventy square metres in Prague currently costs nearly 105,000 crowns per square metre. That means that an average flat of seventy square metres in Prague is sold for around 7.5 million crowns, which is an increase by 18.2 percent on the previous year. Since the 2015, the prices of new flats in Prague increased by 88 percent.

According to newly released data by the Czech Statistics Office, the average monthly salary in Prague in the first quarter of 2019 increased by seven percent year-on-year, to 41,450 crowns.

“The steep rise in apartment prices could only be stopped by a massive offer of new flats. For the first time since 1989, the number of flats projected by investors exceeded 100,000.

However, only a fraction of those are already in development. Most of them are still waiting to get a building permit,” Central group owner Dušan Kunovský told the Czech News Agency. According to the Czech Statistics Office, construction work started on some 2,700 flats last year and developers sold around 5,000 new flats.

“At the current speed of the Prague building authorities, which, over the past ten years, allowed the construction of some 2,400 new flats a year, it would take 40 years before all these projects reach the sale stage.

“At the same time, we need to build roughly 10,000 flats in Prague every year because the number of people who are moving to Prague looking for a place to stay keeps increasing,” Mr Kunovský said.