The Number of Flats for Rent in Prague is Increasing. Sales of New Apartments Down by 50%

The real estate market in the capital continues to be characterized by an increasing supply of apartments for rent.

While in February of this year, around 50 new ads were appearing daily on the server Bezrealitky, in March it was 84 and so far in April, it has been 75. It still stands that the apartments going on the market had originally been intended for short-term leases – on Bezrealitky, specifically, it’s 20 to 25 a day.

Initial prognoses, however, expected April numbers to be significantly stronger.

“At the end that didn’t turn out to be true, mostly due to the impact of the Easter holidays, but also the announcement of gradual easing of restrictions. More and more apartments, originally intended for short-term leases, also end up in the offer column in second-hand systems which don’t monitor the quality of ads in any way,” says the CEO of Bezrealitky, Hendrik Meyer.

He says that this path is often used for offering leases without a contract and lasting for example only one month when the owners haven’t yet given up on the prospect of a strong season.

However, the easing of government restrictions won’t culminate until May 25, and a more robust return of tourists is still nowhere in sight. For example, the Hotel and Restaurant Association of the Czech Republic estimates that tourism won’t restart before autumn, and not in mass numbers by far.

Apartments originally intended as Airbnb rentals also continue to enter the supply.

This is not the only indicator of the fact that Prague’s apartment rental market will continue to have a lot to offer – after all, on March 26 the aggregate service Sreality listed roughly 6,200 apartments for rent while these days it’s nearly 7,900. The several months’ old situation which was characterized by a brutal excess of demand is thus starting to turn around.

“In the segment of residential leases, the demand in March was at 62 % in comparison to last year,” says David Šimečka, who leads the department of residential leases at the real estate agency Svoboda & Williams.

As of now, April demand numbers are comparable to last year’s, but the increase in interest focuses primarily on cheaper real estate. “Our driving force is the decreased rent prices, in particular,” Šimečka added.

Despite the fact that rent prices decreased by tens of percent in certain areas, some people expect that living in the capital will be more expensive in relation to earnings and they are leaving the city.

This is how Hendrik Meyer interprets the trends he has been observing on Bezrealitky – the increase in apartments and houses sold in the Central Bohemian region for the second month in a row, despite an overall decrease in the country. “These are primarily Prague citizens, moving due to the impact of the current situation,” Meyer says.

Finally, it’s worth mentioning that sales of new apartments in Prague dropped by nearly a half, which can be seen in March data published by the server CenovaMapa.org. It can be surmised that due to the state of emergency, up to 225 fewer new apartments were sold, which in the context of real estate developer revenues means a drop by nearly 1,6 billion CZK.

  
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