The 2017 year is coming to an end, Christmas Holidays are knocking to the door and traditionally we would like to summarise the market highlight, our achievements and share plans.
In the outgoing year, we can observe a strong demand and increase in property prices by 19,5% in, which is a continuous trend. As for the last two years, the price increase for residential property in Prague has reached the dramatic mark of 40% (according to Deloitte Analytics). Currently, a square meter of residential property in Prague costs 85 000 Kč / m2 on average and around 95 000 Kč / m2 in a newly built flat. The prices of the construction land, as well as the installation work, are growing rapidly. In addition to the changes in the construction legislation.
Consequently, there is a shortage of the housing supply, which is the major factor of the price increase, particularly in Prague. 5,221 apartments were built for the January to September 2017 period in Czech Republic, only 1,903 out of them in the Czech capital (according to the residential real estate development company Ekospol), while there is a need for 6 000 dwellings in Prague, annually. Therefore, we do not expect any market cooldown, rather a stabilization of the price level. This forecast can be also supported by an overall economic situation in the country such as low unemployment rate, healthy inflation and GDP growth.
Worth noting the investment attractiveness of Prague. The property yield here is higher than in London, Munich, Berlin, etc., and constitutes a stable 5.5% (according to Deloitte Analytics).
Our major achievement in outgoing year was a purchase of new project in Beroun, Byty u Parku. All the preparational work was successfully completed so we are ready to start construction in the beginning of 2018.
Our project MÉLANGE Residence in Smichov, Prague 5 was nominated for the Best Project of the Year Award. It is growing rapidly and we will present our showroom – a fully finished flat in a high-end standard of finishing that we offer in our projects already in spring.
Next year, we plan to build in about 300 flats in Prague, Beroun and Mlada Boleslav. And it is likely that this figure will double soon, as we actively look for interesting investment projects and currently are in the negotiating stage for the acquisition of new projects in Prague.
An upcoming year is going to be a very special for us, a year of our 10 years anniversary!
We strongly believe that the next year will please us with a continuing economic growth, with an increased number of our project and a positive trend in the real estate market.
Let the new year will be full of inspiration and successes for you!
Merry Christmas and Happy New Year!
PRECO GROUP team