Shortage of materials, people and new housing may lead to further rise of housing prices

From January to April, the building authorities in Prague approved 1,111 new flats in apartment buildings. That is 40 percent less than in the same period last year. The whole of last year was also below average. The market is drying up. But not just because of the lack of permits. An increasing problem is the acute shortage of building materials and skilled workers.

The global pandemic has dampened production and the market is now feeling the effects. Wood, plastics, metals and insulation materials are missing. Gone are the days when building materials were in stock. Delivery takes months instead of weeks. Material prices are rising sharply, and it is estimated that this will be the case throughout 2021.

In the last six months, according to a survey by the Confederation of Industry and Trade of the Czech Republic, 91 percent of companies have seen an increase in the prices of raw materials for production. Half of the companies have already increased the price of products and 30 percent of others plan to do so, unless the situation changes quickly. In addition, according to the survey, 44 percent of the companies contacted are facing a shortage of skilled workers.

Few newly permitted flats, high demand for housing in times of uncertainty and cheap mortgages, shortage of workers and rising prices of materials. This may, and probably will, further increase property prices.

Source: CENTRAL GROUP