Czech real estate market under pressure: record prices and the lowest construction output in 25 years
The Czech property market is facing what experts call a “perfect storm.” Prices of apartments, houses, and land are rising at the fastest pace in history while the number of new construction projects is dropping sharply. The result is extreme pressure on housing affordability, affecting both buyers and developers.
Property prices break records
In the first half of 2025, substantial price growth continued across virtually all types of real estate. Apartment prices rose the fastest, jumping nearly 14% year-on-year. Family houses increased by just under 9%, and land prices grew by roughly 7%.
The strongest increases are seen in large cities. In Prague, new apartments routinely sell for around CZK 200,000 per square meter. In Brno, prices are approaching CZK 140,000/m².
Buyer interest remains strong. People purchase homes both for their own use and as investments. Lower average mortgage rates and rising real wages contribute to this trend. Investment purchases even make up the majority of demand for smaller apartments.
Building permits drop to historic lows
While prices rise, construction is slowing. The number of building permits issued in 2025 has fallen to its lowest level since the late 1990s. In the first nine months of the year, fewer than 46,000 structures were approved, and permits for new apartment buildings fell to a twenty-year low.
The causes include slow and complex permitting procedures, a shortage of officials, and complications in digitalizing construction processes. Approval for a new family house often takes half a year or more, which delays both developers and individual builders.
Supply falls, demand rises. Prices soar
A long-term decline in new projects inevitably reduces supply. Because demand remains high — from households as well as investors — prices are pushed even higher.
Buyers often decide quickly and take whatever is available. Supply of smaller apartments is especially limited, which further increases their prices.
What lies ahead?
Unless permitting processes are significantly accelerated and simplified, the situation is unlikely to improve quickly. Construction companies warn that today’s low number of permits will reduce the supply of new apartments in the coming years.
For buyers, this means continued high prices and worsening affordability. For investors, the market may remain attractive, but entry costs keep rising. For the state and municipalities, the current situation signals that without modernizing and simplifying the permitting system, the problem will continue to deepen.
