Realized apartment prices are rising more slowly, but the regional markets have not yet cooled off
While the growth in actual apartment prices slowed to approximately 2.5% quarter-over-quarter in the first quarter, with significantly different trends between Prague and the rest of the country, However, even the current milder growth does not yet suggest a significant slowdown in year-over-year apartment price growth this year. Asking prices do not indicate this yet. This is especially true if there is a shift of pent-up demand for more expensive Prague apartments to the regions. Data from Flat Zone show an average transaction price of CZK 98,000 per square meter for apartments in the first quarter. Stricter criteria for so-called investment mortgages, as well as higher mortgage interest rates, may further cool the real estate market; however, higher wage growth keeps real mortgage interest rates negative.
In Prague,the pace of growth in actual apartment prices has slowed; while this is nothing new for new apartments, it also applies to older apartments in the first quarter. In Prague, prices for older apartments rose by 1.5% quarter-over-quarter, while those for new apartments rose by 1.3%. While the trend for new apartments is similar to that seen in the second half of last year, older apartments grew by an average of 3.7% quarter-on-quarter in the second half of 2025.
Regions slowed down noticeably less. Regions outside Prague also showed asimilar pace in the second half of last year. Although the growth in realized prices for older apartments slowed to 3.1% in the first quarter of this year, this still represents a very strong annualized double-digit rate. The regional market thus shows no signs of a significant cooling so far.
The current quarterly growth implies a continued double-digit year-over-year rate. The year-over-year growth rate of realized apartment prices in the first quarter slowed only slightly to 14.5% for older apartments and to 11.1% for new apartments, down from 16% and 13.3%, respectively. Current quarter-on-quarter growth suggests a year-on-year rate for older apartments of around 12% over the next four quarters. This would be over 13% in regions outside Prague, where there would thus be a slowdown from the current 15.4%, compared to a more moderate implied future 8% growth in Prague following 11.5% year-on-year growth in the first quarter of this year.
Higher interest rates and stricter criteria for so-called investment mortgages will be among the factors contributing to a slowdown in real estate price growth. However, given the strong volume of mortgages arranged in the first five months, the impact will be gradual rather than immediate. This gradual slowdown, however, suggests that wage growth remains strong, which means that even with higher mortgage interest rates, interest rates are still negative. Data from the construction sector paint a mixed picture.
Different statistics from Flat Zone, which uses transaction prices, indicate an average price of 98,000 persquare meterfor apartments sold in the first quarter . Specifically, 161,000 in Prague and 73,000 outside Prague. Although transaction prices showed stronger quarter-over-quarter growth of 2.2% in the first quarter, this follows a slower increase of 0.3% in the final quarter of last year. Furthermore, both quarters were influenced by a composition effect. For example, prices persquare meter for older brick apartments in Prague fell by 2.6% quarter-over-quarter. However, since the number of transactions for these units rose significantly—by nearly a third—and the average price persquare meter for an older apartment in Prague (approximately 154,000 CZK persquare meter) significantly exceeds the average price of apartments in the Czech Republic (CZK 98,000 persquare meter), the decline in the per-square-meter price of older brick apartments in Prague still contributes to the increase in the average transaction price in the Czech Republic. For more details on transaction prices, see below or refer to the data on the CBA Monitor: Real Estate Prices
Actual apartment prices according to the Czech Statistical Office
Flatzone Data Analysis
