Housing is becoming more expensive. The apartment in Brno is already worth the same as in Prague, the most popular location is Cejl
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Real estate prices rose by 14.5 percent year on year, the most expensive are in Prague and Brno, where the price per square meter apartment exceeds 100,000 crowns
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Therefore, more and more people are moving to the countryside, but the value of housing is growing there as well and the construction of new housing estates is not helping yet.
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Paradoxically, the Brno Bronx is not one of the most expensive and popular areas in the Moravian metropolises.
Apartment prices are rising and housing itself is becoming an extremely expensive affair. That is a known fact. Some people are driven by the real estate situation for a long commute, others to build a house out of containers, for example, or to buy a mobile home. Economists like Jiří Pácal from Central Europe Holding, say that rented housing is not a step backwards, but rather something we should get used to. According to ČTK Year-on-year growth in property prices accelerated to 14.5 percent, the highest since housing fever in 2015. In 2021 alone, prices rose by 3.9 percent, the third highest growth in the European Union.
For example, in Brno, during the summer and the beginning of autumn, those interested in an apartment had to prepare for amounts of around 5.75 million crowns. A square meter costs an average of 124,500 crowns, which is 41 percent more than last year. Housing loans in the form of mortgages are also rising sharply. At the current value of the real estate, the bank requires the applicant for a mortgage for a standard two-room apartment to have approximately CZK 1,360,000 saved. He must bring them with him and in cash. The monthly mortgage payment at current interest rates of 3% starts at CZK 23,000 depending on the repayment period.
Investment opportunity
“There are several reasons for the rapid growth in the prices of flats and family houses in the Czech Republic. On the supply side, this is clearly a small supply of new flats due to slow construction. The second reason is the rapidly rising prices of construction work, and especially construction materials, in recent months, ” told ČTK ČSOB analyst Petr Dufek. Not only for Brno, a similar situation means an outflow of population beyond the city limits. Young families move to the countryside, require housing in the big city and become a luxury. Unfortunately, staying in satellites in the suburbs entails the need to commute by car, so columns form around the cities.
Czechs are moving to smaller flats due to rising housing prices. He saves space at the expense of space, says the head of the real estate agency
According to Trikaya, a total of 184 people and entities bought a new apartment in Brno from July to September this year. Four of the ten apartments sold were studios. In Prague, over 2,000 flats changed owners, their prices rose by 19.2% and the price per square meter there no longer falls below 100,000 crowns. The regions are in a similar situation; in addition to the two largest Czech cities, housing is expensive, according to Deloitte, in the Central Bohemian Region, Pilsen and Hradec Králové. On the contrary, the most financially accessible localities are Ústí nad Labem and Ostrava. The Czech average is then 80,100 crowns per square meter.
Most people have recently bought apartments, and studios do not have to, and still do not want to live in them. He sees real estate as an investment opportunity and intends to make money on rent. The smallest flats sold are barely twenty meters high, but the owner can have a monthly rent of between six and eight thousand. The applicant will certainly find it. “For the first time in history, the price of a square meter sold in a new Brno building exceeded one hundred thousand crowns. Thus, every buyer at risk paid 70 percent more for an apartment than five years ago. Even so, the new flats do not remain on offer for long and are usually sold out long before the building approval, ”says Alexej Veselý, CEO of Trikaya.
The end of prejudice
In the predominantly Moravian town, surprisingly, people show the greatest interest in real estate in the area nicknamed the Bronx, ie around Bratislavská and Cejl streets. The infamous neighborhood full of noise, maladapted citizens and clutter is becoming the most expensive location in the city. The value of one square meter here rises well above the limit of 100,000 crowns, which is comparable to Prague. “The situation is quite paradoxical, because this location until recently is gaining affordable new apartments near the center. Prejudices of the problematic locality were suppressed by greater availability of real estate. However, high interest in the tense Brno market quickly screwed up apartment prices in this area as well, despite expectations above the Brno average, ”comments František Šudřich, Trikaya’s sales director.
Newly built flats in Zábrdovice also play a role, where flats of various shapes and sizes are available. A total of 300 flats have been built in the new buildings in the last year, so those interested can choose from a total of 574 unoccupied spaces. The latest projects include houses in Táborská Street with 118 flats and Rezidence Svratka with 179 flats. However, even this demand for supply has not yet led to a slowdown in the dramatic rise in prices. If today people are looking for an apartment that has a furniture room with a kitchenette and one bedroom, they must expect a price of around 6.8 million crowns. Last year, an apartment with three rooms could be bought for similar money.
New housing estates
New residential areas are being built in other parts of the country. In Prague, construction work is underway in areas of several brownfields, for example in Smíchov, Rohanské nábřeží or around the former Pragovka complex. In Holešovice, near the center, it is preparing an extensive construction of the Skanska housing company. He plans to use 150 of them for rent and they will be located in two new towers. Other centers for luxury housing are to be established in Radlická or Radotín.
In the north of the republic, the new housing estate will connect the cities of Liberec and Jablonec nad Nisou. Investor Syner Group is working with a three billion investment to build a residential area with 650 apartments. Most houses should grow to a height of three to seven floors so that they do not obscure the view of the surrounding mountains.
“Every handy handyman can build a house,” says Marek Popálený, a pioneer in container architecture
But it will also be built on the outskirts of the mentioned Brno. In Přízřenice, cooperative blocks of flats will be built next to family houses. They will be designed by Pelčák and partner architects, and the construction of block buildings in combination with smaller apartment buildings will cost one and a quarter billion crowns. “There are 380,000 permanently registered inhabitants in Brno, but there are half a million people in Brno every day. If we subtract the students, eighty to ninety thousand people commute to Brno every day for work. This worsens the traffic situation. Twenty thousand flats are missing in the city, so it is good that cooperative flats are being built, ” presented Pelčák for Brněnský Deník.
Green widows
It is also becoming more expensive in the countryside. People therefore resort to commuting to work, which takes an hour or more. For example, in the Zlín Region, there is a decrease in loose packages in villages that did not attract young people before. In addition, many of them cannot get used to rural life and eventually return to the city. Thus, concepts such as reurbanization or green widows appear. These are women living in a cottage outside the city, essentially alone, because their husbands return from work late in the evening due to commuting, and they spend most of their time picking up children at school and transporting them around the city. Then they stay at home and miss the hustle and bustle of the cities.
An alternative to living directly in Brno have long been apartments in the Brno-venkov district, which are sold at a price of 64,000 per meter. Even there, however, flats are quickly becoming more expensive, and yet there are no family houses or plots of land. In the last year alone, the prices of new flats have climbed by as much as 50 percent, to 95,000 crowns per square meter. “The demand for housing within reach of Brno is great. Due to the extremely high prices, a family apartment in the city is an unattainable goal for many inhabitants, so they resort to its borders. But now it turns out that enormous interest is making apartments more expensive in these areas as well, ”concludes František Šudřich.