Pardubický: Prague's middle class can't afford new housing

by   CIJ iDesk I
2018-01-16   09:59
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The Czech property company FINEP completed more than 1,400 business transactions worth a total of CZK 4.5bn in 2017. This involved the sale of 438 new flats and homes on its own (438) as well as through Maxima Reality (964). FINEP achieved revenues of CZK 2.26bn through sales of new real estate (a fall of 5 percent), while Maxima Reality saw its revenues from property sales rise 7 percent to CZK 2.32bn. Demand for family homes rose 70 percent last year, while the most popular apartment size was 2+kk. That same size flat is, not coincidentally, the most popular for customers buying flats as an investment, a trend which grew 33 percent among new build units. FINEP hopes to sell 500 new residential properties in 2018.

FINEP's director Tomáš Pardubický says that the complicated permitting process, rising taxes and constant changes to the rules surrounding construction norms is causing a dramatic fall in the supply of flats. "Thanks to city and state policies, residential construction in Prague has gotten into a situation where normal working families are depending on renting," he said. "Thinking about social housing would ony worsen the situation for middle class earners as you see Germany and France backing down on similar unsuccessful experiments."