The offer of new residential buildings in Q3 2024 in Prague has decreased slightly, reports BuiltMind in its quarterly analysis of Prague residential segment. However, outlooks are optimistic, thanks to stable inflation and declining rates.
The number of available units fell below 5,400 units in Q3 2024. Compared to Q2 2024, this was a significant decrease of almost 10%, bringing the supply level to 5,367 vacant units. Demand in Q3 2024 fell slightly as expected, but with 1,585 units sold to the public, it was still significantly higher than Q1 2024 and only about 4% lower than the record Q2 2024.
In the second quarter of this year, the market absorbed approximately 30% of publicly available units. Compared to Q4 2023 and Q1 2024, this is still a significant increase from around 25%.
The amount of the average offer price in the third quarter of 2024 increased by approximately 1.3% compared to Q2 2024. The increase of the average price to the level of CZK 156,445 per sqm (€6.183) means matching the price peaks from 2022.
In terms of public sales recorded on project websites, Central Group did the most in Q3 2024 with 227 publicly sold units. FINEP followed with 186 public sales. Developer Skanska also did well with almost 100 public sales. In the third quarter of 2024, the most successful project was the Kaskády Barrandov XIX cooperative project, with 118 public sales and almost 7% market share, which was completely sold out. Following are the long-term successful projects Tesla Hloubětín Residential District or Park District Residence. However, several projects across different locations achieved good numbers in the past quarter. At the same time, by far the most units were sold in Prague 9, which has long been one of the most competitive areas in the whole of Prague.
Inflation remained around the 2% target even in the third quarter of 2024. The Czech National Bank (CNB) predicts that inflation will remain close to 2% for the rest of 2024 and 2025. In the second quarter of 2024, the CNB reduced the base interest rate to 4.25%. A further decline is expected in the following period, which should continue to a level of approximately 3.5% at the end of 2025.
Due to the further expected reduction of interest rates from the CNB, BulitMind predicts that the market will reach a level between 1800-2000 public sales per quarter in the following period.
