According to a report by Knight Frank, the prices of older apartments in Prague have experienced a decline of around 2.2 percent in the past six months, with the average price dropping to 8.5 million Czech korun. Interestingly, the supply of these older apartments on the market has also decreased by 14 percent during the same period. In contrast, the prices of new build apartments have remained stable, with an average offered price of 9.7 million Czech korun.

On the other hand, premium residential properties have seen a price increase of 1.9 percent, reaching 202,430 Czech korun per square meter. The demand for these high-end properties has been driven by the scarcity of affordable housing options in the city.

Kateřina Poláková, the Head of Residential Properties at Knight Frank, suggests that the period of caution and stagnation in the market has come to an end with the arrival of spring. Buyers are now placing greater emphasis on housing quality and have higher expectations regarding standards and additional services. Poláková believes that there is now a balance between price and property quality, which is a shift from the pandemic years when low mortgage rates led to rapid sales of properties at high prices.

While rental prices experienced a significant increase last year, the rate of expansion has now slowed. Price differences in rent are influenced by the condition of the units and the availability of vacancies in specific locations. For example, the analysis by Knight Frank shows that average rents in Prague 8 have increased by 11 percent in the last six months, while they have decreased by 5.3 percent in Prague 3.

Eduard Forejt, the director of Business Development at Czech investment company Passerinvest, suggests that the pressure from new residential construction could further reduce rental prices for older apartments. As financially secure individuals move from the secondary market to new builds, they leave behind cheaper vacant apartments in the rental market. Similarly, downsizing from one older apartment to another could have a similar effect on rental prices.

As the Prague real estate market continues to evolve, buyers and renters are adjusting their preferences and expectations, leading to changes in property prices and rental rates. The impact of new residential construction and shifting demographics will be crucial factors to monitor in the coming months.

Article by Prague Forum