The year 2023 is quite difficult for major developers in the Czech Republic—construction is declining, projects are postponed, and the crisis worsens. The reason is that people cannot afford mortgages and, consequently, new housing.

In March this year, the construction authorities issued 13.3% fewer construction permits compared to last year, and 20% fewer residential buildings were started. As a result, experts expect the market to shrink by about 2% this year.

One of the reasons for the negative impact on the construction sector is the ongoing military conflict in Ukraine. This was reflected, for example, in the rise in prices for building materials. In addition, the availability of skilled labor for the Czech construction industry has also suffered because of this situation, according to Mr. Eduard Muricky, the Deputy Minister of Industry and Trade. He also points to the negative impact of the current level of interest rates, which has frozen the situation in the mortgage market.

But there is hope for a new law on construction, which is in progress now. Ivan Bartos, Minister of Regional Development of the Czech Republic, commented on it.

“We finally have a solid legal regulation on the table, which will bring confidence in a stable legal environment to planners, builders, and other participants in the construction and thus help stabilize the construction industry as a whole,” Bartoš said.