In 2022, building authorities across the Czech Republic issued a total of 61,613 building permits, reflecting a significant decrease of about 10,500 permits compared to 2021. This decline, which amounts to nearly a third of the permits issued in the previous year, highlights an ongoing negative trend in the construction sector. Martin Gürtler, an economist from Komerční banka, noted that difficulties with the digitization of the building approval process largely contributed to this downturn, suggesting that this is not just a temporary issue but a persistent problem that could hinder future construction efforts.

The construction of residential units, in particular, has faced severe challenges, with developers and individuals starting the construction of only 35,819 new apartments last year. This figure is markedly insufficient, especially in Prague, where an estimated 10,000 to 15,000 units are needed annually to meet demand. Only 7,380 units began construction in the capital last year, significantly below the required amount, which exacerbates the housing crisis and reflects the inadequacy of the current supply to meet the growing demand.

The slow processing of permits is one of the critical factors contributing to rising real estate prices in the Czech Republic. Delays imposed by bureaucratic procedures increase the costs of construction, which, in turn, allows sellers to pass on these higher costs to buyers. This situation results in a constrained market, where potential homebuyers have limited options and are often forced to accept properties at inflated prices, thus further straining the housing market in the country.