International Property News

Builders complete 9.8% more homes in Q1

13th May 2008

The number of homes completed in the Czech Republic in the Jan-March period increased by 9.8 percent year-on-year to 9,158, the Czech Statistical Office (CSU) said Tuesday.

The construction of 9,750 homes started in Q1, up 4.4 percent over the same year-ago period, and 171,383 homes were under construction, one percent more year-on-year.

The highest number of completed flats was in Prague in Q1. Building companies completed 2,000 new flats in the Czech capital.

As for the number of started flats, the Stredocesky region with 2,200 flats whose construction started in Q1 got ahead of Prague.

The period of a record growth of housing construction seems to be over, for now, said CSOB analyst Petr Dufek. "It will be quite difficult to see the solid growth of completed homes repeated in the next quarters because in the second half of last year housing construction rose by more than 40 percent due to uncertainty regarding VAT change and high demand," said Dufek.

Vladimir Pikora of Next Finance also talks about a threat to the boom in housing construction.

"The number of signed mortgage contracts fell by 15.6 percent on the year and their volume decreased by nearly 9 percent. People do not want to run into debts as much as in the past," he explained.

This could also be given by the fact that after news from the USA, speculators are less willing to buy flats whose price is too high in many cases, he added.

Developers' activities, however, still grow dynamically, according to him. This concerns the completion of homes under construction as well as the launch of construction of new homes, he said.

The highest increases were registered for family houses (22.1 pct or 813 homes), homes completed as extensions to tenement houses (51.0 pct or 157 homes) and homes in converted non-residential space (37.4 pct or 71 homes).

Decreases were recorded for homes in tenement houses (3.0 pct or 102 homes) and apartments in community care service homes and boarding houses (57.4 pct or 93 homes).

The highest share in homes under construction was recorded for family houses (50.2 pct), the lowest for homes in converted non-residential space (1.3 pct).

Homes under construction are on the increase in the long term because the number of homes started increases more rapidly than the number of those completed. Homes whose construction has been suspended are also included.

Modernisation of 5,165 homes was completed in Jan to March this year, which was by 2.8 percent less year-on-year.

Source: Prague Monitor