Apartment prices are already hitting the ceiling, interest is falling. However, extreme Prague is catching up with other cities
Housing prices in the Czech Republic continue to rise. Buying an apartment in Prague with an average of 113 thousand crowns per square meter is already far beyond the capabilities of ordinary households. Rents are again more expensive due to energy prices. Demand for real estate is therefore beginning to shift significantly to other regions. However, market surveys of several real estate companies do not yet anticipate any major changes in the price of housing.
There are several reasons why property prices are still not falling. “In some regions, growth is demonstrably pushing residential demand, in others they are the driving force of investment funds and individuals or the never-ending hunger for recreational housing. associated in the EEC group.
For family houses, according to the monitor, they fell from the third quarterly record in twelve per square meter in eight out of fourteen regions, and in the case of flats in the districts. The growth rate of prices for family houses has increased from 15 to 22 percent in the last three months, and for flats to 23 percent compared to 16 percent for summer.
“An interesting development is taking place in Prague. At present, an average apartment is sold here for almost 113 thousand crowns per meter, however, the market has demonstrably hit its ceiling and demand has weakened in favor of other regions. “The average price shot at 106.5 thousand crowns per meter with a 10% increase in interest,” says the EEC report.
The best time to sell a house
Brno is setting a new record in the price of flats. For the first time, they are sold here for an average of more than 80,000 crowns, ie the amount that the Prague year 2019 cost.
According to him, flats in Central Bohemian towns have also reached a major milestone. For the first time, they averaged over 70 crowns per meter with a year-on-year growth rate of over 21 percent. The main reason is the strong demand from households that want to leave Prague and exchange longer travel times for a lower property price.
“It is still true that today is the best opportunity to sell a family house in the last twenty years. This has brought to the market a number of new properties in interesting locations, which were sought after by urban households as an alternative to expensive apartments in the center and wider city,” says Vladimir. Zuzák.
Prices are rising extremely fast in the former regions, especially in the case of flats. Demand from residents and investors is pushing for prices, especially in the Karlovy Vary, Ústí nad Labem, Liberec and Moravian-Silesian regions, at a rate of around 40 percent. According to Zuzaka, this trend may trigger a transformation of living conditions in the cities and districts of these regions, which have long been affected by below-average demand.
Ostrava is becoming more expensive
Similar real estate prices across the Czech Republic were also based on an analysis by FérMakléři.cz, which cooperates with more than 100 real estate brokers from large and small offices throughout the Czech Republic.
“The pace of price growth is relatively enormous. It is most evident in Ostrava, where the average price per square meter is 45 percent to 43,764 crowns. In Prague, a square meter of floor space is more than two and a half times more expensive. That is why I see in Ostrava the potential for higher year – on – year price growth than in Prague continues, “says Jan Boruta, the company ‘s managing director.
He adds that the supply of real estate has been very low for a long time, which is still pushing prices up across the country. “Although our new political party has ambitions to facilitate the rules for new construction, it will not affect housing prices as quickly,” Boruta thinks, pointing to rising inflation that investors fear in the future and therefore continue to buy apartments.
However, according to real estate agents, price growth could gradually begin to slow down. “The main effect will be lower availability, which will increase the price sensitivity of buyers. And the main signal, which in some cases is beginning to hit the price cap, has already come. “More real estate was sold in cheaper regions, but less in the more expensive ones. In addition, the time needed for the most expensive ones to negotiate a deal is being extended,” explains Hendrik Meyer, head of Bezrealitky.cz.
Rents will rise again
According to the EHS monitor, a significant change in the third quarter was reflected in the case of rental housing. The number of applicants who ask for it has doubled and the total number of requests has approached the limit of 210,000. Nevertheless, average rental prices have risen only slightly so far and the number of concluded rental transactions was slightly lower than before the holidays.
In Prague, rents have stabilized at 272 crowns per rented square meter of apartment, which is a three percent increase compared to the previous quarter. In Brno, the rental price for an apartment rose by four percent to 247 crowns per rented square meter. Prices and demand can be expected to rise sharply in the next two quarters.
The reason is mainly changes in the field of mortgage loans, which for tens of thousands of households means postponing or reassessing their dream of investing in their own real estate. And according to experts from GarantovanyNajem.cz, high electricity and gas output will also increase rents.
“Rents have been growing in the last three months, especially in large cities, with an increase of almost 10 percent in Prague and slightly over six percent in Brno. However, growth in the most attractive locations will slow down dramatically or stop completely in the coming months. Other localities are also expected to fall in price. It mainly concerns regional cities, “says Viktor Mejzlík, co-founder of the GarantovanyNajem.cz service.
According to him, people will not be able to pay higher amounts for rents, because energy deposits will increase.
“People will not be willing to pay large sums for new rents. In the most extreme cases, the tenants will have no choice but to move to cheaper apartments or locations. Landlords will be forced to go lower with rental prices,” Mejzlík comments.
The energy situation is expected to stabilize next spring. This should stabilize energy prices. But as a result, the prices of “bare” rents will begin to rise again.
Average price per m2 – 3rd quarter 2021 | Family house | Be | Rent |
Capital City of Prague | 106 401 CZK | 112 756 CZK | 272 CZK |
Central Bohemian Region | 59 650 CZK | 71 233 CZK | 211 CZK |
South Bohemian Region | CZK 36,533 | CZK 50,353 | 182 CZK |
Pilsen Region | CZK 30,594 | CZK 52,223 | 190 CZK |
Karlovy Vary Region | CZK 44,526 | CZK 48,461 | 155 CZK |
Usti Region | CZK 31,693 | 29 193 CZK | 156 CZK |
Liberec region | CZK 42,491 | CZK 54,741 | 187 CZK |
Hradec Kralove region | CZK 31,447 | 58 358 CZK | 198 CZK |
Pardubice region | CZK 34,430 | 59 730 CZK | 185 CZK |
Olomouc region | CZK 35,724 | 54 105 CZK | 185 CZK |
South-Moravian region | 42 840 CZK | 82 880 CZK | 247 CZK |
Zlín Region | CZK 32,687 | CZK 47,568 | 177 CZK |
Highlands | CZK 24,468 | 51 643 CZK | 163 CZK |
Moravian-Silesian Region | 29 146 CZK | CZK 39,545 | 158 CZK |
Source: EEC real estate group