Dušan Palcr, the chairman of the board of J&T Real Estate (JTRE), recently presented the next steps in the construction of the flagship project of this development company: the residential district Nový Rohan. This new neighborhood will be built just a stone’s throw away from the Karlin offices where we currently find ourselves.
Spanning four hectares on Rohanský Island, Nový Rohan will see the construction of over a thousand apartments, shops, and office spaces within the next ten to twelve years. In close proximity to the project, a new elementary school and Maniny Park will also be developed. The estimated cost of this project is around 15 billion Czech crowns.
Palcr and his team have now unveiled the details of the first phase of Nový Rohan. This phase will involve the construction of 258 apartments ranging from 1+kk to 4+kk layouts. Construction is set to begin next year, starting from the Libeň Bridge. The total cost is expected to reach 3.5 billion Czech crowns, with completion scheduled for two and a half years.
Despite the slightly above-average pricing of the units in this first phase, ranging from 165,000 to 200,000 Czech crowns per square meter, JTRE has already started selling the first apartments. The spring pre-sale saw a significant number of interested buyers, with some even considering the option of combining two units. The upcoming Metropolitan Park Maniny is also a major attraction for residents, making it one of the reasons to choose to live here.
Jiří Ochetz, a member of the company’s board of directors, emphasized the appeal of the micro-district being created, offering amenities such as shops, green inner courtyards, and a new cycle path, all within a short distance from the city center.
The chief architect of Loxia Studio, Jana Mastíková, highlighted the focus on public courtyards and green inner blocks in Nový Rohan. The aim is to create a welcoming environment for residents by planting a large number of trees and implementing rainwater harvesting systems to prevent unnecessary runoff into the sewer system.
The design of all buildings in Nový Rohan emerged from an architectural competition, where the developer selected five proposals, including four from Czech studios and one from the Slovenian firm Bevk Perović arhitekti. The residential buildings in the first phase – Vincent, Prokop, and Barbora – are named after the patron saints of significant Czech bells that were collected by the Nazis during World War II and later converted into weapons.
Moving on to the real estate market in Prague, a study conducted by iO Partners for JTRE revealed that those who purchased a new apartment in Prague in 2014 saw a 155% increase in its value by the end of last year. This growth rate is the highest among the four major cities in Central Europe – Prague, Berlin, Bratislava, and Warsaw.
Pavel Ryska, an analyst at J&T Bank, pointed out that the Czech Republic has experienced one of the most significant increases in property prices since 2008, with a surge of 218%. However, the rapid price hikes came to a halt in the second half of 2022 due to rising interest rates in response to inflation. Despite this, signs of a real estate market revival are now emerging in the Czech Republic.
The recent availability of new mortgages, with interest rates dropping by almost one percentage point since the end of 2023, has contributed to the resurgence of the real estate market. Additionally, the rise in real wages and the reduction of VAT from 15% to 12% have also played a role in stimulating the market.
Sales of new apartments continue to increase, with nearly a 150% year-on-year growth in the first quarter of this year, where 1,600 new apartments were sold in Prague. The average price of a new apartment in Prague is 142,000 Czech crowns per square meter, with various promotional offers and incentives such as including a kitchen in the price.
Looking ahead, experts anticipate a mild single-digit increase in property prices in the near future, reflecting the improving sales driven by mortgage volumes and the better macroeconomic situation. The positive demographic trends in the Czech Republic are also expected to support property prices in the long term.
Knight Frank, a real estate consultancy firm, noted a significant increase in mortgage lending in Prague from October 2023 to March 2024, indicating a resurgence in the market. However, rental prices continue to rise, particularly in Prague 6, 4, and 7, with an expected annual increase of five to ten percent. As property ownership prices continue to rise, renting is becoming a more attractive option for a wider range of clients.
In conclusion, the real estate market in Prague is experiencing a revitalization, with developers ramping up the release of new properties to meet the growing demand. The future trajectory of property prices will depend on the pace and volume of new listings entering the market, as well as how they respond to evolving market conditions.