Developers are responding to the changing market situation, where demand for rental housing is growing significantly, mainly due to mortgage interest rates.

Last year, developers sold 2,400 new apartments in Prague, the lowest number in the last 20 years. An analysis by the development company Ekospol shows a year-on-year decline in sales in the capital of up to 62.8%. The market for new apartments in Prague has been hit by expensive and inaccessible mortgages and an uncertain economic situation. In addition to expensive mortgages, the reintroduction of stricter requirements for assessing mortgage applicants has also had a significant impact.

However, price increases have slowed down. Prices of new apartments on the Prague market have peaked and are likely to stagnate, according to Ekospol's CEO. ČSOB analysts also consider 2023 to be a period of continued market stabilization. Inflation has probably peaked and will gradually decline.

Developers no longer routinely sell all residential units to individual customers. They set aside some of the new apartments for rental housing. One reason for this is that over the past fifteen years, many domestic development and real estate companies have become so financially strong that they can afford to wait for a longer return on their investment.

More developers are considering the construction of rental buildings. Some projects are already exclusively rental. For example, Afi Europe is involved in the construction of BTR projects, where it has managed to rent out more than half of the apartments on offer. Also worth mentioning is the cooperation with Well Group a.s., which has more than three projects in Prague consisting of fully furnished residential units intended for both short-term and long-term rental.

In addition to sales and relocation of foreign students, our company is also an expert in BTR projects – renting residential units in large quantities. During our operation in the Czech Republic, we have acquired and rented a total of 53,000 m² of rental housing.

Source: iDNES.cz, Rental Housing Association