Will real estate prices in Prague go up in 2025?

Last updated on June 17, 2025

Authored by the expert who managed and guided the team behind the Czech Republic Property Pack

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Prague property prices are climbing rapidly, with new apartments averaging CZK 167,947 per square meter in June 2025—a historic high for the city.

The Prague residential market has experienced four consecutive quarters of price growth, with year-on-year increases ranging from 10% to 16% depending on the property type. Strong demand fueled by falling mortgage rates and limited housing supply continues to push prices upward across all districts.

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Quick Summary:

Prague property prices have surged to record highs in June 2025, with new apartments averaging CZK 167,947 per square meter and showing 10-16% annual growth. The market is driven by strong demand, falling mortgage rates (now 3.5-4.6%), and chronic housing shortages, with analysts predicting continued growth of 5-10% annually through 2030.

Key Metric	Current Value (June 2025)	Year-on-Year Change
New Apartment Price (per sqm)	CZK 167,947	+10-12.5%
All Flats Median Price (per sqm)	CZK 131,382	+16%
Mortgage Rates	3.6-4.7%	-1.5 to -2%
Prague 7 Price Growth	CZK 200,000+ per sqm	+25%
Sales Volume (2025 projected)	8,000+ units	+15%

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

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What are the current mortgage rates for property buyers in Prague?

As of June 2025, mortgage rates in Prague have dropped significantly to between 3.6% and 4.7%, making property purchases more accessible than they've been in years.

The Czech National Bank has lowered its base rate from 7% in 2023 to 3.5% in May 2025, which has directly translated into more favorable mortgage conditions for buyers. Average mortgage rates have fallen by roughly 1.5 to 2 percentage points compared to just a year ago, when rates hovered around 5-6%.

This dramatic improvement in financing costs has had an immediate impact on buyer behavior. For a typical Prague apartment purchase, the rate reduction means monthly payment savings of several thousand crowns, bringing many previously priced-out buyers back into the market. Banks are reporting a significant uptick in mortgage applications throughout 2024 and into 2025.

The spring mortgage boom has been particularly notable, with buyers rushing to lock in these favorable rates before any potential future increases. First-time homebuyers and young families have been the primary beneficiaries of these lower rates, though investors are also taking advantage of the improved financing conditions.

These lower mortgage rates have created a positive feedback loop in the Prague property market, with increased buying activity supporting prices, which in turn encourages more buyers to act quickly before rates potentially rise again.

How much have Prague property prices increased in the last 12 months?

Prague property prices have risen sharply over the past 12 months, with different property types experiencing varying levels of growth across the city.

New-build apartments have seen prices increase by 10% to 12.5% year-on-year, with average asking prices now reaching CZK 167,947 per square meter as of June 2025. For all flats including both new and second-hand properties, the median price has surged even more dramatically, rising 16% year-on-year to CZK 131,382 per square meter.

The growth has been particularly pronounced for older properties in Prague, which experienced an 18% year-on-year increase throughout 2024. Family houses in the capital have also performed strongly, with prices rising 15% annually, outpacing similar properties in other Czech regions.

This consistent upward trajectory follows a brief period of stagnation in 2022-2023 when high mortgage rates temporarily cooled the market. The current growth phase has now extended for four consecutive quarters, with demand for new apartments approximately one-third higher than pre-pandemic levels.

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Which Prague districts are seeing the fastest property price growth right now?

Prague 7 leads all districts with an extraordinary 25% annual price increase, pushing average prices above CZK 200,000 per square meter in this increasingly popular area.

Following closely behind, Prague 3 has experienced price growth exceeding 16% year-on-year, driven by its vibrant neighborhoods like Vinohrady and Žižkov. Prague 10 has seen an 18% increase, while both Prague 9 and Prague 2 have recorded 17% annual growth rates.

District	Annual Price Growth	Average Price per sqm	Key Driver
Prague 7	+25%	CZK 200,000+	Trendy neighborhoods, cultural scene
Prague 3	+16%	CZK 145,000	Vinohrady charm, young professionals
Prague 10	+18%	CZK 125,000	Improving infrastructure, affordability
Prague 2	+17%	CZK 180,000	Central location, historic appeal
Prague 1	+19.55%	CZK 196,300	Prime location, luxury segment

The most expensive districts remain Prague 1, 2, and 7, with central locations commanding premium prices. Prague 1 continues to hold the title of most expensive district with average selling prices reaching CZK 196,300 per square meter, accompanied by the strongest year-on-year growth of 19.55%.

Meanwhile, Prague 8, 4, and 9 remain among the more affordable districts, with median prices between CZK 118,174 and CZK 122,560 per square meter, offering better value for budget-conscious buyers while still experiencing steady growth.

What types of properties are experiencing the biggest price surges?

Small apartments, particularly one and two-bedroom flats, are leading the price surge in Prague, accounting for 75% of all sales and experiencing the steepest price increases.

Studio apartments have become especially expensive relative to their size, with average prices expected to hit 4 million CZK in 2025. While they cost less in absolute terms due to their smaller size, the high price per square meter makes them proportionally expensive. The strong demand from young professionals, students, and investors seeking rental properties drives this segment.

Family houses in Prague have also seen remarkable growth, with prices rising 15% year-on-year, outpacing similar properties in other Czech regions. This reflects growing demand from families seeking more space, particularly in suburban areas with good connections to the city center.

New-build apartments command the highest premiums, with average asking prices now exceeding CZK 167,947 per square meter. Properties featuring modern amenities like smart home technology, energy-efficient systems, and outdoor spaces such as terraces or balconies are seeing particularly strong demand and price appreciation.

The luxury segment in central and historic districts like Malá Strana and Staré Město is expected to see continued price growth of 3-7% throughout 2025, driven by limited supply and strong international demand.

What do property price forecasts predict for Prague in 2026 and beyond?

Analysts expect Prague property prices to continue rising in 2026, though at a more moderate pace of 5-10% annually compared to the rapid growth seen in recent years.

The Czech National Bank projects that the upward trend in property prices will persist through 2025 and into 2026, but the year-on-year growth rate is expected to remain relatively low compared to the boom years of 2020-2021. This moderation reflects a market finding a new equilibrium after the post-pandemic surge.

For the medium term (2025-2030), most experts anticipate annual price growth in the 5-10% range, driven by persistent supply shortages and continued strong demand. The chronic housing shortage in Prague, with only 5,270 construction permits issued this year against a needed 10,000 annually, suggests upward pressure on prices will continue.

Looking at the longer term (10-20 years), demographic trends and the structural undersupply of housing suggest sustained price appreciation unless there's a significant policy shift or economic downturn. The rental market is also expected to expand, with institutional investors increasingly entering the sector.

Economic forecasts showing Czech GDP growth of 2.8% in 2025 and continued low unemployment support these optimistic price projections, though risks include potential inflation resurgence or delays in housing policy reforms.

How does June 2025's average Prague property price compare to five years ago?

Prague property prices have increased by over 65% in the past five years, representing one of the most dramatic appreciation periods in the city's history.

In June 2020, average apartment prices in Prague had just surpassed CZK 100,000 per square meter for the first time. By June 2025, average asking prices for new apartments have reached CZK 167,947 per square meter, while the overall market median sits at CZK 131,382 per square meter.

This 65% increase over five years translates to an average annual appreciation of approximately 10-13%, far exceeding inflation and wage growth over the same period. The surge has been driven by multiple factors including pandemic-era monetary policies, supply constraints, and Prague's growing appeal as an international destination.

Looking at the decade-long view, asking prices for new homes in Prague have risen by more than 160%, effectively more than doubling. A 70-square-meter apartment that cost around CZK 4 million a decade ago now commands CZK 11.25 million according to current market valuations.

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Where are Prague property prices rising fastest - city center or suburbs?

Central Prague districts are experiencing the most dramatic price increases, with Prague 1, 2, and 7 leading the surge with growth rates between 17% and 25% annually.

Prague 1, the historic heart of the city, recorded average selling prices of CZK 196,300 per square meter with 19.55% year-on-year growth. Prague 7, encompassing trendy neighborhoods like Holešovice and Letná, has seen an extraordinary 25% annual increase, pushing prices above CZK 200,000 per square meter.

However, suburban areas are also experiencing significant appreciation, particularly those with improved infrastructure and transport connections. Prague 9, despite being more peripheral, has become the city's most active market due to large-scale development on former brownfield sites, offering relatively affordable prices around CZK 146,000 per square meter.

The suburbs are attracting families seeking larger living spaces and better value, with proximity to green spaces and schools being major factors. New metro extensions and improved public transport links have made suburban districts more accessible, driving demand and price growth in areas that were previously considered too distant.

Overall, while central districts command higher absolute prices and prestige, suburban areas are catching up in terms of growth rates, particularly those undergoing urban regeneration or infrastructure improvements.

What is driving the current Prague property price increases?

Price Driver	Impact Level	Description
Housing Supply Shortage	Very High	Only 5,270 permits issued vs 10,000 needed annually
Lower Mortgage Rates	High	Rates dropped from 5-6% to 3.6-4.7%
Population Growth	Moderate	Metro population expected to reach 1,332,000 by 2025
Foreign Investment	Moderate	International buyers attracted to Prague's EU location
Economic Recovery	Moderate	GDP growth forecast of 2.8% for 2025

The chronic housing shortage remains the primary driver, with Prague needing at least 10,000 new construction permits annually but only issuing 5,270 this year.

Falling mortgage rates have dramatically improved affordability calculations, bringing previously priced-out buyers back into the market and creating intense competition for available properties. The Czech National Bank's rate cuts from 7% to 3.5% have made borrowing significantly cheaper.

Population growth continues to pressure the market, with Prague's metropolitan area expected to reach 1,332,000 residents by 2025. This growth is driven by job opportunities in the city's booming tech and service sectors, attracting both domestic migration and international workers.

The slow approval process for new developments, partly due to issues with the new Building Act, continues to constrain supply. Combined with strict historical preservation laws in central areas and limited land availability, these regulatory challenges ensure that demand consistently outpaces supply.

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How do current Prague property prices compare to other European capitals?

Prague has become more expensive than Budapest and Warsaw for residential property, though it remains more affordable than Vienna in most areas.

As of June 2025, Prague's average price of approximately €6,369 per square meter (CZK 167,947) for new apartments positions it as one of the pricier Central European capitals. Vienna ranges from €5,800 to €8,000 per square meter, with central areas commanding higher prices than Prague. However, Prague's most expensive districts now match or exceed Vienna's mid-range areas.

Budapest averages €3,500-€4,500 per square meter, making it significantly more affordable than Prague. Warsaw shows similar pricing to Budapest at €3,500-€5,000 per square meter, also notably cheaper than the Czech capital. This pricing hierarchy reflects Prague's stronger economy and its appeal as a cultural and business hub.

Among the 150 European cities tracked by various property indices, Prague now ranks in the upper third for property prices. The city's 65% price increase over five years has outpaced many Western European capitals, though cities like Berlin, Paris, and London remain substantially more expensive.

Prague's combination of EU membership, political stability, and cultural appeal continues to attract international buyers, supporting its premium pricing relative to regional peers.

What is the current level of demand for Prague properties?

Demand for Prague residential property has reached near-record levels in June 2025, with over 8,000 new flats expected to be sold this year, potentially breaking previous records.

The market has shifted dramatically from the cautious sentiment of 2022-2023 to one of rising optimism. Demand for new apartments increased by more than 15% in the fourth quarter of 2024 compared to the previous quarter, and this momentum has carried into 2025. First-half sales of 5,350 units already represent nearly double the year-on-year figure.

Buyer psychology has clearly changed, with many now more worried about prices rising further than about overpaying in the current market. This fear of missing out (FOMO) is driving quick decision-making, particularly for well-priced properties in desirable locations.

The resale market has also seen remarkable activity, with sales of older apartments rising by 24% and detached houses by 37% in 2024. This broad-based demand across all property types indicates genuine market strength rather than speculation in any single segment.

Banks report that mortgage applications continue to grow steadily, with the spring mortgage boom being particularly notable as buyers rush to lock in favorable rates before any potential future increases.

How has inflation in early 2025 affected Prague property prices?

With inflation moderating to around 2.4% in May 2025, Prague property prices have actually outpaced inflation significantly due to strong market fundamentals.

The dramatic drop from the 15.1% inflation peak in 2022 to current levels around 2.4% has helped stabilize consumer confidence and improve real wage growth. This has made property purchases more feasible for many Czech buyers who saw their purchasing power eroded during the high-inflation period.

However, property prices have risen 10-16% year-on-year, far exceeding the general inflation rate. This divergence reflects that real estate operates on different dynamics than consumer goods, with supply constraints and demographic factors playing larger roles than monetary inflation.

The European Commission forecasts inflation to remain around 2.2% through 2025, providing a stable environment for continued property investment. Lower inflation has also allowed the Czech National Bank to cut interest rates, further fueling property demand.

While moderate inflation has helped restore buyer confidence, the property market's own supply-demand imbalances remain the primary price driver rather than general economic inflation.

What impact are government housing policies having on Prague prices?

Despite ongoing debates, no major housing policy reforms have been enacted as of mid-2025, allowing market forces to continue driving prices upward unchecked.

The European Committee of Social Rights recently condemned the Czech Republic for inadequate housing rights protection, highlighting the severity of the affordability crisis. A new draft bill on housing assistance is under discussion, but the legislative process remains slow with no immediate relief in sight.

The problematic implementation of the new Building Act continues to hamper development, with approval processes for new construction remaining lengthy and complex. This regulatory bottleneck ensures that supply cannot quickly respond to demand, perpetuating price increases.

Local Prague authorities have approved plans for 146,000 new apartments in various development projects, but actual construction starts lag far behind. With only 5,270 construction permits issued this year against the 10,000 needed annually, the planning-to-delivery gap remains substantial.

Without comprehensive policy intervention to streamline approvals, increase public housing investment, or implement demand-side measures, analysts expect market dynamics to continue favoring sellers and driving prices higher through 2026 and beyond.

Conclusion

Yes, property prices in Prague are rising significantly, with new apartments reaching record highs of CZK 167,947 per square meter as of June 2025.

The market shows no signs of slowing, driven by chronic housing shortages, falling mortgage rates, and robust demand that continues to outpace supply. With annual growth rates of 10-16% across different property types and districts, Prague has firmly established itself as one of Central Europe's most expensive property markets. Looking ahead, analysts predict continued but more moderate growth of 5-10% annually through 2030, making Prague property an attractive but increasingly costly investment opportunity.

The combination of limited supply, strong demand, and favorable financing conditions suggests Prague property prices will continue their upward trajectory through 2025 and beyond. While the pace of growth may moderate from recent peaks, the fundamental imbalances in the market remain unresolved.

For potential buyers, the message is clear: Prague property is becoming increasingly expensive, and waiting for prices to fall appears unlikely given current market dynamics. The chronic undersupply of housing, combined with Prague's growing appeal as an international city, continues to support price growth across all segments of the market.