JLL has just released its H1 2020 Residential Market Update for Prague. Below is a summary of its findings:

Supply close to a 10-year high…

In H1 2020, construction started at a total of 2,690 apartments in 33 projects in Prague. This was a 41% increase, compared with H2 2019. Based on the number of projects that are in an advanced stage of preparation, the number of commencements in H2 2020 is expected to reach approximately 3,300 apartments.

The total number of completed apartments reached 1,840 units in 27 residential projects during H1 2020. However, this was around 48% less than the high level of completions in H2 2019. For H2 2020, the number of apartments scheduled for completion is approximately 3,900 units, which would exceed the five-year H2 average by nearly 26%.

During H1 2020, Prague 9 continued to lead in terms of new supply with more than 640 apartments delivered, which accounts for more than one third of the total. On the other hand, Prague 5 has registered the highest volume of newly commenced apartments reaching 821 units (31% of the total).

The total number of apartments under construction reached nearly 9,700 units at the end of H1 2020 which indicates the highest level since 2011. Out of all the apartments which were under construction at the end of H1 2020, approximately 40% is due for completion in H2 2020.

…but demand is falling

During H1 2020, a total of 2,380 units were sold in new apartment buildings and fully refurbished projects. Compared to H2 2019, the total number of sold apartments during the period fell by 12%.

Compared to a year earlier the total number of sold apartments declined by 6% and when compared to the five-year average, the current sales are 15% below the average.

During H1 2020, the largest volume of sold apartments according to districts was registered in Prague 7, followed by Prague 10 and Prague 5. The most in demanded apartment type was for one-beds, which accounted for 40% of total sales.

Prices

Based on JLL statistics, the average sales price for apartments that are currently available for sale on the market, reached CZK 89,846sqm (£2,995sqm), showing an annual increase of 6%. These prices exclude VAT.

During H1 2020, the largest share of apartments listed for sale was in the CZK 80,000 to 100,000sqm price range (excl. VAT). These apartments currently represent 52% of the market offering.