The rising cost of housing in Prague is leading people to purchase smaller apartments than before. Developers at the e15 REsummit 2024 highlighted the need to triple the pace of construction in order to slow down the growth of housing prices in Prague. The summit focused on the latest trends in construction, sustainability, and digital technologies that will shape the future of development in the Czech Republic. One major topic of discussion was the future of Prague’s train stations, which are crucial for the city’s transportation infrastructure.
According to developers, the market has changed compared to the pandemic years. Karel Týc, a partner at Natland Group, noted that during the COVID-19 era, there was an increase in demand for larger apartments due to societal functioning. However, the increase in apartment prices has reached around 30% in 2021 and 2022, with a slight decrease last year. This increase in prices is shifting demand, with people now seeking smaller apartments than before.
Týc emphasized that the only way to keep further price increases at an acceptable level is to increase the supply. The main issue lies in the permitting process, which can take seven to ten years in the Czech Republic. To balance the demand and supply gap, the construction pace would need to be tripled.
Construction is significantly hindered by objections that can be raised by practically anyone towards planned developments, noted Petr Palička, the head of Penta Real Estate. He highlighted that anyone can stop a construction process without personal responsibility, which needs to change to facilitate smoother construction processes.
In Prague, both residential and office development are lagging behind demand, as pointed out by Pavel Novák from Savills. While residential construction has slowed down, office construction has practically halted, despite the creation of around 40,000 new office jobs in Prague since 2021.
The shortage of both owned and rental housing is not unique to the Czech Republic but is a pan-European phenomenon, according to Zuzana Chudoba, the founder of BTR Consulting. To prevent the deepening housing deficit in Prague, ten thousand new apartments need to be built every year.
A new type of rental housing, resembling a hotel in many ways, is emerging in the Prague market. Projects like Luka Living and Dům Radost have shown high demand, with faster returns on investment than initially projected, indicating the overflow of demand into the rental sector.
The Prague City Development Company is working on increasing the availability of rental apartments in the city. The first projects are expected to receive building permits at the turn of this and next year, with the city having resolved the financing of these projects by then. The city developer is preparing fifty projects with up to eight thousand apartments.
With new construction on the outskirts of Prague, the issue of transportation accessibility arises. Ondřej Boháč, the director of the Prague Institute of Planning and Development, noted that the concept of a „city of short distances“ has not been successful in new Prague neighborhoods due to regulations limiting development compared to Western countries.
Jiří Nouza, the president of the Association of Entrepreneurs in Construction, highlighted the emergence of many „dormitory suburbs“ around Prague, whose residents are economically active in Prague and commute daily. He suggested merging Prague and the Central Bohemian Region into one administrative unit to make sense of this commuting pattern.
In many parts of Prague and between the city and the Central Bohemian Region, the transport capacity is reaching its limit, according to Petr Tomčík, the director of ROPID. While some areas are densely populated, investing in more populated areas is financially sustainable compared to creating a „city of short distances“ in sparsely populated areas.
Architect Jiří Řezák suggested taking inspiration from Vienna, which has been building „regional centers“ within the agglomeration of the Austrian capital for decades. This approach could reduce the need for commuting to the city center by providing essential services within neighborhoods, similar to the example of Karlín in Prague.
The conclusion of the e15 REsummit 2024 focused on key transport hubs connecting the metropolis not only with the Central Bohemian Region but also with the train stations in Prague. Several Prague train stations are set to undergo significant transformations in the coming years, including the ongoing reconstruction of Masaryk Station and its surroundings, as well as the railway connection to Prague Airport.
The revitalization of Vrchlické sady, the construction of a tram line from Wenceslas Square to Bolzanova Street near the station, and the reconstruction of the departure hall are part of the plans. The design of the new departure hall has sparked controversy, with Minister of Transport Martin Kupka advocating for preserving the existing hall from the late 1970s.
Jiří Svoboda, the CEO of the Railway Administration, noted that the proposed design by the Danish studio Henning Larsen Architects for the renovation of the departure hall is subject to change. He emphasized the importance of utilizing EU funds for railway projects to transform train stations into vibrant urban spaces.
Another major project aims to cover a large part of the railway tracks at the main station, creating space for lucrative developments in Prague. Petr Hlaváček, the deputy mayor of Prague for development and spatial planning, supported the idea, envisioning a transformed space that would be inviting for evening activities.
In conclusion, the challenges and opportunities in Prague’s housing and transportation sectors require innovative solutions and collaboration between stakeholders to ensure sustainable development and a high quality of life for residents. The transformation of train stations and urban spaces presents a unique opportunity to shape the future of the city and enhance its connectivity and livability.