Analysis of housing prices: Rents in Prague have fallen due to competition, flats continue to rise in price
According to the analytical company Flat Zone, new flats are currently being offered in Prague for CZK 116,866 per m2; in all other regions, the average offer is CZK 69,054 per m2 of new flat.
“We are able to find out the last offer price of all apartments from the developer price lists, which allows us to estimate sales prices up to two years before they reach the real estate cadastre. In Prague, the current sales price is 107,877 CZK per m2, in the regions it is 65,573 CZK per m2, “describes the results of Flat Zone manager Vít Soural for SZ Byznys.
So far, development projects in the Vysočina Region (CZK 46,080) are being offered at the lowest prices, in which a segment of new buildings with a stable offer will quickly be created quickly. “If they stay here at this fast pace, we expect strict new demand and faster price growth,” the businessman estimates.
Outside Prague, new flats in the Hradec Králové Region (CZK 91,789 / m2) are offered at the highest prices. The reason is that the supply of competing projects is quite small here, so developers are testing the market by raising prices to analyze demand. If prices are too high and sales are slow, apartments will simply become cheaper. “Other regions are also undergoing a similar transformation, such as the Moravian-Silesian or Zlín regions, where the offer price for the last quarter climbed to double-digit growth,” adds Soural.
On the contrary, the opposite growth of prices can be observed according to the analysis of regions such as Ústecký or Liberecký, which have recorded high volumes of sales of ski apartments in recent quarters. These projects are now selling slightly less, so the resulting average bid price is lower, according to the analysis.
In Prague, prices are growing at a steady pace, rising by 2.2 percent in the last quarter and by 8 percent last year.
At Flat Zone, he works as a project manager.
Vít has a bachelor’s degree in business management from Cass Business School and a master’s degree in international real estate and planning at UCL in London.
In 2017, his classmates founded the Plexus business community, which he expanded to the Czech Republic, and has the ambition to expand it worldwide.
He is the son of the owner of Trigema, the developer Marcel Soural.
The development of rents is different. In Prague, the rent is offered for CZK 308 per m2 and it is a quarter-on-quarter decrease of 4.3 percent. The decline is clearly due to a significant shift in the market for short-term Airbnb leases to the long-term market. This shift has caused supply to almost double, which pushes down prices by comparing competitors.
Outside the capital, the cheapest rents are on average in the Moravian-Silesian (163 CZK / m2) and Ústí nad Labem regions (163 CZK / m2), the most expensive rents are in the South Moravian (256 CZK / m2) and Central Bohemian regions (236 CZK / m2).
“Unlike purchase prices, rental prices cannot change so quickly, because lease agreements are usually negotiated for at least one year, and price increases are usually resolved with a one-year delay,” you will find out Vít Soural.
In addition, tenants are not able to increase their rents by tens of percent every year, so the price increases more slowly and stably. To Rush and reduce yields (annual return on investment in percentage terms, note. redakce) when buying real estate, which could discourage some investors from investing in the real estate market in the future, ”he adds.
It is a project that uses advanced technologies to analyze the real estate market.
For those interested in housing, it offers an aggregator of the same name, which gathers the entire offer of Czech development projects in one place.
For real estate companies, it offers a data platform in which a comprehensive analysis of the real estate market is simply possible.
Flat Zone works with its own digital tool that automatically updates data from web and home developers daily. From other public sources, the company collects data on civic amenities in individual localities, on the development of prices and offers, on demand trends, the development of rents, sales of so-called second-hand flats and the like.
“Flat Zone serves individual people interested in housing, but our main goal is a paid B2B service aimed primarily at developers or banks,” says Soural junior.
According to the customer, Flat Zone is able to generate an analysis of a specific location created according to the customer’s needs thanks to digital data analysis within 15 minutes. “A similar report takes up to three business days for developers following the classic path. Not all development companies have their own analytical department, “they add as a result of Soural.