The market prices of apartments continued to drop in the second quarter of 2012, according to figures by the Czech Statistical Office released on Thursday. The prices of older flats decreased by 5.7 percent while the prices of new apartments in Prague fell by 3.4 percent. Analysts say the continuing decrease in apartment prices is related to the construction of new housing projects.
On Tuesday this week Prague’s Národní třída metro station –one of the busiest in the city centre –closed its doors to the public for two long years. The closure is due to a large developer’s project in the close vicinity of the station where work has already started on a four-storey administrative and shopping centre.
According to a fresh survey by the consulting company Deloitte, Prague is the most expensive city in Central Europe when it comes to prices of newly built real estate. Currently, the average square meter rate for new apartments is at some 2500 Euro, which is comparable prices in Berlin. Prague is one of the few cities where new real estate costs more than twice as much as new properties in the rest of the country. Among the twelve European cities compared in the survey, Paris was the most expensive, with some 8000 Euro per square meter. The cheapest properties were found in Budapest, where buyers are looking at 940 Euro per square meter.
Around 30 people, who were evacuated from the Prague Marina apartment complex on Saturday morning, were able to return to their homes. The building had to be evacuated again due to cracking walls after tenants in the luxurious new complex, located in the Holešovice neighbourhood in Prague 7, called the emergency services; the fire brigade then evacuated the complete building. The incident took place less than two weeks after some 30 people had to leave their apartments after one of the structural supports bent and the building threatened to collapse.
After years of growth, the real estate market in the Czech capital has seen a slow but steady decline, with decreasing prices and many more new listings having turned Prague property into a buyer’s market. One factor behind the change is waning interest from foreigners to invest into real estate in the Czech capital. However, some parts of Prague have become more attractive for Czechs and foreigners alike, while others remain popular primarily with foreign clients.
Real estate agents report that the economic uncertainty is making Czechs cautious in their housing decisions. They say potential buyers are extremely cautious in taking out mortgages and many people now prefer to rent out property until the economic situation improves. In the course of 2011 interest in renting property, particularly flats, has risen by over 17 percent. Many companies have announced lay-offs at the start of 2012 and the number of Czechs who are unable to pay their debts is on the rise.
The planned demolition of an Art Nouveau building on Prague’s Wenceslas Square is drawing increasing opposition in the form of an on-line petition, while seeing hundreds take part in a protest meeting on Tuesday on the square itself. The building in question, 1601 Opletalova, is not itself a heritage site but is located within a protected area. The owners and developers want to tear the structure down (as well as gut the interiors of two adjacent buildings) to make room for a new commercial centre. Other than the petition, few obstacles stand in
The Czech Republic’s slow and painful steps from regulation to market regarding for rented flats will take a big step forward at the start of next year when rent controls end for around 450,000 apartments. Last week the government proposed accompanying laws rebalancing the relationship between landlords and tenants. But the former say these don’t go far enough, and experts are warning that the courts could be swamped by tens of thousands of cases over rent levels.