The year 2024 brought an unexpected turnaround to the Prague residential market. Despite high interest rates on mortgage loans, which still represent an obstacle for many potential buyers, there has been a significant increase in sales of new apartments. People stopped waiting for cheaper mortgages and decided to invest in their own homes, fearing further increases in real estate prices.

So how is this trend manifesting itself and what can we expect in 2025?

What happened in 2024

• Developers in Prague sold 5,870 new apartments (+61% compared to the previous year).
• The second quarter was the best in eight years.
• The growth occurred despite persistently high mortgage rates.

Impact on prices

Growing demand for new apartments has also led to higher prices. For the first time in the history of Ekospol's methodology, the price of a new apartment exceeded CZK 150,000 per m².

This milestone means that prices of new apartments are roughly 3% higher than a year ago. This is due not only to higher demand, but also to limited supply, influenced by a complex permitting process and a shortage of building land.

If we add to this the exhausted zoning plan and the unsuccessful digitization of the building permit process, the situation on the market for new apartments in Prague will remain tense.

"Prices of new apartments are being driven up by increased demand, which continues to exceed supply. This is limited by one of the most complicated new building permit processes in the world," adds Korec.

What to expect in 2025

Given that demand for new apartments in Prague continues to exceed supply, we can expect prices for new apartments to continue to rise in 2025. Although mortgage rates may fall slightly in the future, this is unlikely to be enough to significantly reduce apartment prices.

If you are planning to buy property in the capital, prices are likely to continue to rise. For those looking to invest in real estate, now may be a good time to make a decision, as prices are expected to continue to rise in the long term.

Conclusion

The Prague real estate market in 2024 showed that even in difficult economic conditions, interest in housing has not waned. The year 2025 will bring further challenges and opportunities that will be interesting to watch.