Apartment prices: Prague is not the number one rise in price, growth is higher elsewhere in the country
Flats cannot be reduced in price, on the contrary, another significant increase in prices is expected. The slowest prices will rise surprisingly in Prague. Prices are driven by high demand. This is the ninth year in a row. According to the price analysis, which was prepared by real estate broker RE / MAX Iztok Toplak, will not be different in the coming months.
In addition to long-term development, Toplak focuses on apartments for which the future owners have already signed contracts, but their actual sale will not end until the coming weeks. The analysis is based on contracts actually concluded and does not include the offer prices of developers for new apartments.
Prague is growing the slowest
Apartment prices in Prague have been rising since the beginning of 2012. And this trend continues in 2021, in all segments of the housing stock. For example, the average price of an apartment in a brick house found itself at a new historical maximum of 110,000 crowns per m2.
Flats in prefabricated houses reached the price of 90,000 crowns per m2. The analysis of sales prices of older flats in the second quarter and the reservation of orders, which will be completed in the third quarter of this year, confirm that smaller price properties will continue.
According to Toplak, the total average price of flats in Prague in the third quarter of this year will break the limit of 102,000 crowns per m2. This is 24 percent compared to the first quarter of 2020 (before the onset of the coronavirus epidemic, note Red.), when the average price was around 83,000 crowns per m2.
The analysis is based on data that cover mainly one tenth of the Czech real estate market and have been verified for a long time Price map and other resources. This is a market for secondary housing, ie free from the influence of development projects. Second-hand housing alone accounts for about two-thirds of the market.
The forecast of the real estate analysis that apartment prices in Prague have been rising for a long time and will continue to be so in the next quarter is not surprising. We also confirm the trend with the largest Czech real estate portal Sreality.cz. According to his current data, so far everything suggests that in comparison with this year’s months of January and May, the offer price of real estate in all regions of the Czech Republic continues to rise.
“Specifically, in Prague, for example, we record an increase in the median prices of newly entered real estate offers of around 5% this year compared to January and May, and this trend continues,” says Hana Kořínková, manager of the Sreality.cz advertising services team. According to her, long-term apartments are still in the 2 + kk category.
Prices are rising mainly in the regions
However, according to the forecast of broker Iztok Toplak, significantly more dramatic growth is to come in the regions. The average realized price of flats according to the currently reserved orders will exceed 50,000 crowns per square meter of living space in the Czech Republic (excluding Prague) in the third quarter of this year. This is usually almost 40 percent compared to the first quarter of 2020, ie with the period before the start of the restrictions caused by the pandemic, when the average realized price was less than 36,000 crowns per m2.
Other monitored regions and cities behave very similarly and practically all continue to grow. In Brno, the average price of an apartment can currently reach over 85 thousand crowns per m2.
In Kladno, Kolín and Pilsen, for the first time in history, the price exceeded 60,000 crowns per m2. Significant growth also continues, for example in Ústí nad Labem, which is perceived as the cheapest regional city. Which in comparison with other cities will seem worth 29 thousand crowns per m2 as very low, even six years ago, real estate was sold here for an effect of 10 thousand crowns per m2.
They do not only make apartments more expensive
In addition, in some areas, according to experts, there is a big boom around recreational housing.
For cottages and chalets, the usual prices are more pronounced than for apartments or houses.
“These regions are affected by the large number of holiday properties sold. For cottages and chalets, the usual prices are more pronounced than for apartments or houses, “said Radek Farkaš from RE / MAX Gold.
According to Trinity Bank analyst Lukáš Kovanda, demand for real estate in the Czech Republic is still strong due to economic prosperity between 2014 and 2019, during which the purchasing power of the domestic population may increase significantly and Prague in particular may still participate in the global real estate market.
“The rise in property prices in the Czech Republic may continue in the long run, which, in addition to other weak offers, is fundamentally due to the ongoing process of macroeconomic convergence to the richer countries of the European Union. This process will continue, “Kovanda added.
Eurostat data also speak about how fast housing prices are rising in the Czech Republic. According to him, domestic growth was the fourth highest among the countries of the European Union. Year-on-year growth in house and apartment prices in the Czech Republic accelerated to 11.9 percent in the first quarter, while prices rose by 8.9 percent a quarter earlier.
“Inflation in the real estate market is not coming to an end and the hope that price growth will moderate remains very low. The trend of these prices was not broken by either the pandemic or the recession associated with it, and therefore it can hardly be expected that the situation may soon turn in favor of buyers, “said ČSOB analyst Petr Dufek.
The sale time is extended
From the point of view of sellers, it is important that the time of sale of real estate gradually increases. The RE / MAX real estate network has been monitoring the time calculated from the date of the decision to sell until the end of the transaction for a long time. The shortest average sales time was in 2017 and was 109 days. Since then, it has been extended every year. Today we have to wait for the completion of the sale of the apartment for more than 122 days. This includes the waiting time for the transfer in the real estate cadastre, which is usually more than 25 days.