International Property News

New home starts fall 19.1% in Q4

16th February 2009

A total of 9,686 dwellings started to be built in Q4 last year, a year-on-year drop of 19.1 percent, and 12,397 dwellings were completed, down by 30.4 percent on the year, the Czech Statistical Office (CSU) said Monday.

The construction of 43,531 dwellings was launched last year, 0.6 percent fewer than in 2007.

The total of 38,383 dwellings was completed last year, down by 7.8 percent on the year. According to statisticians, the trend varied during the year and an initial increase was replaced by a decrease in Q2 2008.

Completed dwellings also registered swings. While in Jan-Sept the number of completed dwellings grew on the year, the slump in Q4 was eventually the cause of a yearly decline.

"As a result of the limited access to banks' finances and the current slump in demand for new housing, developers have decided to postpone their projects," analyst Iva Novakova of the real estate consultancy King Sturge told CTK.

"A number of projects remains only on paper for now and some projects that are under construction have been suspended for the time being," Novakova added.

Most of the real estate companies are now facing a decline in demand for new housing by around 20 to 30 percent.

"We expect the demand to continue to decrease in H1 2009 as well," Dan Tok, CEO of domestic number one building company Skanska CS, told CTK.

The number of flats in family houses that started to be built increased by 6.6 percent in Q4 2008.

Dwellings in extensions to family houses grew by 3.7 percent and to tenement houses by 7 percent.

The most marked decreases were observed for flats in tenement houses, down by 44.7 percent.

The total of 176,120 dwellings remained under construction in Q4 last year, up by more than 3 percent on the year. The highest shares in dwellings under construction were reported for family houses (50.6 percent) and multi-dwelling buildings (19 percent). This decrease was partly affected by the high comparative basis of Q4 2007, the statisticians said.

The number of completed dwellings increased only in family houses, up by 8.3 percent and in converted non-residential spaces, up 15.9 percent.

In Q4 2008, modernisation of 5,996 dwellings was completed, up by 13.1 percent year-on-year.

According to the Local Development Ministry, there will be around 32,000 to 36,000 dwellings started and completed this year.

Local Development Minister Cyril Svoboda expects the number of modernised dwellings to either remain flat or grow only slightly.

Source: Prague Monitor