Flats in panel houses are a quarter cheaper than brick ones.

Prague - Apartments in panel houses in the Czech Republic were, on average, about a quarter cheaper at the end of last year compared to brick houses. Compared to new constructions in development projects, they were cheaper by 36 percent. Apartments in panel houses increased in price year-on-year by an average of 6.4 percent to 47,900 crowns. This is based on data from the consulting company Deloitte. According to experts, apartments in panel houses, while historically not having the best reputation, have seen a rapid increase in popularity in recent years due to their affordability, both in terms of price and location.

"The quality of panel houses has changed dramatically over the past 20 years thanks to extensive revitalizations, particularly because panel houses have received a final look in the form of facades. Therefore, today panel houses are perceived as a comparable option to other types of construction. Another reason is that people have simply gotten used to them and view them as part of today's housing estates," said Jan Štěpánek, regional director of the real estate company 4fin, to ČTK.

According to Vladimír Zuzák, director of Maxima Reality, it greatly depends on the condition of the panel apartment. The biggest influence on the price comes from old core materials, outdated electrical installations, and also the condition of the entire building, such as windows or insulation. "On the contrary, newly renovated apartments can be priced similarly to those in older buildings. It is interesting that in the period before the coronavirus pandemic, the price difference between panel houses and brick houses was decreasing. The prices of panel apartments have indeed been rising at a faster pace in recent years," added Zuzák.

Hendrik Meyer, director of Bezrealitky, stated that the example of panel houses clearly shows that in the direct market, every property has its buyer. "Overall, it holds that panel houses have significantly increased in price over the past years, and in many locations, such as central Bohemian towns near Prague, they are still in demand. On the other hand, lower-quality ones in peripheral locations will now stagnate in price or even decrease," said Meyer.

According to Jan Boruta, managing director of FérMakléři.cz, in most cases, it is not crucial for clients whether the house is made of panels or bricks. "People primarily focus on the location and civic amenities. Panel apartments, besides having a lower purchase price, often also have lower energy costs, specifically heating. Of course, there are downsides such as uniformity of space or undersized parking areas. But in general, it is not possible to lump all panel houses together," said Boruta.

According to Andrea Daňhelová, managing director of Fincentrum Reality, apartments in panel houses are also ideal for investment, where sellers subsequently rent out the apartment. As she stated, panel houses that are in good condition are popular. A typical example is the Invalidovna housing estate in Prague. "Apartments in panel houses have not historically had the best reputation, but in recent years their popularity has dramatically increased, and this is due to affordability, both in terms of price and location," Daňhelová added.

As stated by Jan Martina, regional director of M&M Reality for Prague, from an urban planning perspective, most panel housing estates in the capital offer a number of advantages. Ample green space, excellent access to the main public transport lines, and complete amenities right in the area. "This is often not the case with new development projects built on green fields. Compared to older brick construction, panel houses are also less expensive to maintain," added Martina.

The first panel house in the Czech Republic is considered to be the building in Prague's Ďáblice on U Prefy street. On Wednesday, it will be 65 years since the first residents moved in. According to Martin Hanák, director of the methodological department of the Association of Czech and Moravian Housing Cooperatives (SČMBD), the first truly standardized project was built in 1954 in Zlín.