The availability of new and rental flats in Prague is still a problem

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There are multiple factors influencing the offer of new flats on the market. In particular, they include low demand, high mortgage interests and still quite high prices of construction work and materials. The situation in rental housing is the exact opposite.

The availability of new flats has not been improved even by the stimulus by the Czech National Bank, which reduced the DSTI (Debt Service-to-Income) ratio (the percentage of the amount of all monthly instalments relative to the credit applicant’s net monthly income), thus making mortgages available to a wider range of those interested in housing.

Another factor is the fact that the number of flats being built is still far lower than what the market could absorb.

However, an advantage is that developers who began to build flats before the crisis are currently finishing their projects, so potential customers can physically see and compare the flats offered. That is a significant difference in comparison to the pre-crisis period, when flats would “disappear” before completion. It is, however, still true that if a property provides something extra and is not overpriced, it is not a problem to sell it.

There is no panic on the market and owners are not selling their properties for prices significantly lower than before the crisis and with regard to the number of flats available, such a situation is not expected.

A considerable increase in demand is expected in the spring of 2024 but the important thing will be the development of mortgage loan interest rates. If interest rates are reduced under 5%, the demand may be noticeably boosted, and in the long-term, interest rates are expected to go down gradually to 3%. It is anticipated that the increase in demand will be lower than the previous decrease.

In the premium real estate market, the offer continues to be stable although the choice of properties is still limited. “The premium real estate market is not as dependent on interest rates since a relatively higher percentage of the property prices is paid from the clients’ own funds. However, there is an obvious trend of clients’ higher expectations in terms of luxury properties,” says Filip Šejvl, Managing Partner, Philip & Frank, adding: “Thanks to Prague’s strategic location in Central Europe, there is also a higher pressure on the availability of premium housing as a result of foreign clients’ demands, which we can see thanks to our membership in the international network of independent real estate companies, LeadingRE.”

In rental housing, the situation is relatively dynamic. The demand is very high – owing to, among other things, mortgages being unaffordable – and in general the offer of flats to rent is lower than the demand. Furthermore, the pressure on rental housing is higher as a result of foreign clients’ demand. That leads to a gradual increase in rental housing prices in the long term.

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Words from our past clients

We have been cooperating with Philip & Frank brokers for a few years. Throughout that time it has been proved that it was a good choice. We are especially satisfied with their transparency and regular information about the progress of each project. At the same time we have always been in control of all decision-making. We will be happy to recommend them and their legal services to our friends and relatives. It was our pleasure warking with them.

Martin and Tereza K.

While we were selling our flat, we approached the brokers of Philip & Frank who had been recommended to us. I was really satisfied and delighted. Their truly professional approach – meetings with us, organization of tours of the flat with clients and arranging the formal aspects of the sale, including cooperation with an excellent lawyer – was astonishing. I appreciate their competence and I recommend this real estate agency to other clients.

Ludmila K.

Thanks to the professionalism of Philip & Frank real estate brokers I learned that even purchasing a property can be a pleasant experience. Their thoroughness, reliability, helpfulness and kindness enabled us to concentrate only on the property. We were relieved of all the worries regarding the purchase and we could simply enjoy buying the flat. That is what you dream of but I would never have thought that it could come true. Thank you for your perfect services!

Zuzana P.

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Company Address
Philip & Frank s.r.o.
Štefánikova 1/65
150 00 Praha 5
Czech Republic