“The process of obtaining a building permit itself often takes more than 10 years,” said Michaela Tomaskova, executive director of Central Group, an apartment developer. “Developers struggle to put new apartments on the market and the supply is not sufficient to meet the demand.”
In central Prague, apartment prices have soared from 55,555 Czech korunas a square meter (about $220 a square foot) in 2015 to 102,058 korunas a square meter (about $407 a square foot), an 84 percent increase, according to a report from the property firms Trigema, Skanska Reality and Central Group. (The Czech Republic has been a member of the European Union since 2004, but uses its own currency, the koruna, rather than the euro.)
The rising prices have caused sales volume to slow in recent months, said Blanka Vackova, head of research for the Prague office of JLL, the property consultancy. “The market is not as hot as it used to be,” she said.
But demand remains high, especially for less-expensive, one-bedroom apartments, which accounted for 37 percent of sales in Prague in 2018, Ms. Vackova said. About 30 percent of buyers are investors, looking to capitalize on the growing number of renters who can’t afford to buy, she said.
Masarykovo Embankment, where demand remains high, is one of Prague’s most expensive areas, prized for its river views, central location and historic sites, agents said. Apartment prices in Prague are “often determined by the accessibility to the center and the distance from the public transportation, which is widely used by Prague’s residents,” said Pavel Hassman, owner of Re/Max 4 You, a local agency.