The real estate market in the Czech Republic has recently been most influenced by the overall economic situation associated with current events in Europe including the war in Ukraine, expensive energy prices and high interest rates. According to 2023 PSN data in the residential segment, the situation is favourable for investor purchases.
In 2023, PSN sold more than 200 properties and concluded or extended nearly 630 lease contracts. The total value of completed transactions exceeded CZK 1.5 billion (€60.7 million). The company expanded its portfolio by 23 new acquisitions for more than CZK 1.3 billion (€52.6 million). Most of them were investments in apartment buildings in Prague, Brno and Pardubice. The developer is looking for further opportunities, this year's acquisition plan reaches CZK 1 billion (€40.5 million). PSN still sees potential in the rental housing segment, as interest in rentals has increased due to the unfavourable situation in the mortgage field.
In the following period, the company predicts recovery and moderate growth of the market, which began to manifest already in Q1 2024. The banks responded promptly to the CNB and lowered their interest rates, which are currently below the 6% threshold on average. Developers are gradually monitoring mortgage loan clients' returns and no longer postponing their demand.
“The forecasts were certainly not ideal, but it turned out that it did not significantly weaken the market. It is a fact that due to high interest rates, the segment of clients buying real estate through mortgage loans has relatively disappeared. They postponed their demand, which consequently meant lower sales of apartments. On the other hand, however, the appetite of investors has increased again. They bought in larger volumes, especially smaller units with layouts of 1+kk and 2+kk," Max Skala, CEO at PSN summarises the situation and adds: "In general, clients were very interested in new buildings and renovated apartments. In our apartment buildings, however, we have also recorded interest in units before renovation."
At the beginning of this year, PSN launched an extensive and sensitive reconstruction of the Grand Palace of the First Republic in the centre of Pardubice by the famous Czech architect Josef Gočár. The renovation proposal from the OVA studio aims to restore the functionalist building and at the same time modernise it following the example of foreign department stores. PSN plans to put the centre into operation in the Autumn of 2025. The company is also building a parking garage with 269 spaces nearby. It should be ready in Q3 2024.
The Vanguard project with 150 lofts, the conversion of the former Microna factory in Prague's Modřany, should be completed soon. In the immediate vicinity, the company started constructing the Ahoj Vanguard project in 2023, which offers 94 apartments. Another launched project was the new construction of the Maroldka Residence in Prague-Nuslí, where 38 units will be created. More prep plans include the Plynárenská area transformation in Brno, the transformation of the Koh-i-noor complex in Prague's Vršovice and together with Penta the implementation of a project on land in Vinohradská Street in Prague.
