Demand for premium properties and their sale is rising continuously. In the first half of the year, clients of Svoboda & Williams bought apartments with spacious floor areas and and sales records were broken. While the residential rental market has remained stable, the lease of office space in Prague is stagnating. However, this undersaturated market offers many opportunities. These are the key trends of Prague’s real estate market in the first half of 2024 based on the current half-year analysis conducted by Svoboda & Williams.
Svoboda & Williams’ analyses reveal that clients’ interest in exclusive, large apartments in the first half of 2024 increased significantly. “We sold 40% more apartments with two-bedroom, three-bedroom, and four-bedroom layouts than in the second half of last year.“ Some of the exceptional properties we’ve listed in the last several months had record-breaking price tags. This made the average price for a new build in our sample surpass the CZK 160,000/m² limit,” says Prokop Svoboda, owner of Svoboda & Williams. This year, clients of Svoboda & Williams paid an average of CZK 160,431 per square meter for new builds and CZK 147,536 per square meter for resale apartments. On average, real estate prices grew by 3% in the first half of the year.
According to Svoboda, successful property sales are often underpinned by investments into client relationships, which the entire Svoboda & Williams team focused on during the recent recession. “Professionalism and a personal approach allowed us to deepen our relationships and strengthen mutual trust. During the crisis, clients became increasingly aware that the services provided by top real estate brokers is a key factor in the success of a transaction in a cooling market. Cultivating our business has undoubtedly been one of the positive impacts of the downturn,” adds Svoboda. Demand increased by 36% in the half-year comparison, while the volume of actual transactions went up by 17% “We recorded a record number of Czech clients, who in the first half of 2024 made up 78% of all buyers,” states Kryštof Kušiak, analyst at Svoboda & Williams.
Rental housing prices remained stable in the first half of the year, rising by one percent to an average of CZK 39,465 compared to the previous half-year. “As usual, the biggest interest was in the smallest studio to one-bedroom apartments in the wider center of Prague,” says Kryštof Kušiak. Expats have returned following the recent recession, making an impact on the rental market. “They currently make up 65% of all tenants. In the highest price segment, i.e. over CZK 55,000/month, 80% of the properties are rented by foreigners,” explains David Šimeček, head of residential rentals.
The commercial office market remains stagnant. “Many office tenants are grappling with the post-covid labor market and high construction, and therefore fit-out, costs. Understandably, in the past few months companies preferred to renegotiate lease agreements rather than move out,” says Jaroslav Waldhauser, head of commercial leasing. According to him, market dynamics are stymied by the fact that Prague lacks new administrative projects of sufficient size and parameters. “Until a quality project in a good location appears in an undersaturated market, tenant interest will remain high,” concludes Waldhauser.
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How the Svoboda & Williams Market Report Is Created
The analyses in the Market Report are based on sales and rental transaction data generated by the activities of the Svoboda & Williams real estate agency. These figures are supplemented by data on property sales obtained from the Cadastre of Real Estate with similar parameters to the monitored sample. The Market Report works exclusively with data based on achieved prices, additionally taking into account the price of parking and the proportion of the exterior. This methodology uses a specially developed algorithm to recalculate the exterior area that progressively reduces this area and takes into account the ratio of the interior to the exterior. The Market Report is published four times a year. It compiles data from the last two quarters and compares real estate market movements over two consecutive half-year periods.
Another useful tool for a more accurate interpretation of the rental market is the Rental Price Index by S&W + VŠE, an analytical tool developed by Svoboda & Williams in cooperation with the Faculty of Informatics of the University of Economics in Prague. The source of the data for this index are the actually achieved rents for apartments offered by Svoboda & Williams, and it compares the development of the rental market on a semi-annual basis.
