In Prague's Modřany, the construction of a residential project worth 2.5 billion has begun.

The project is divided into several phases, with the first phase set to create 240 flats in two buildings. The completion of the first phase is planned for autumn 2020. "Our cooperation with Karlín Group has already proven successful on the Residence Vltava project. We will implement five more buildings with an offer of 560 units under our management," said Jišaj Furman, general director of Horizon Holding.

The Zahálka residential quarter is located at the border of Hodkovičky and Modřany. The seven apartment buildings will also include commercial spaces. The project also includes a kindergarten that will be operated by the municipality. "The entire complex includes underground parking for 1000 cars so that the entire surface remains preserved for greenery," Furman added. According to the general director of Karlín Group, Jan Ludvík, more than a fifth of the apartments in the first phase have already been sold.

Residential construction in the capital has recently lagged behind the demand for new flats. According to data from the Czech Statistical Office, the number of started construction projects for apartments in apartment buildings dropped by 12.6 percent year-on-year to 1161 by the end of July. More than two-thirds of this was accounted for by the Zahálka project, which was fully included in the statistics. Developers sold 2750 flats in Prague in the first half of the year.

"The decline in new building permits can be attributed to the inflexibility of state authorities. The shortage of flats can significantly impact their prices, and the expected decline in prices may not occur," said analyst Jan Lener from Broker Consulting. In the past three years, prices for new flats in the capital have risen by nearly 70 percent, and the average selling price is approaching 100,000 crowns per square meter.