How is the demand for one’s own housing shifting to rented housing?

That trend is clearly beginning. Although this year’s first quarter was still relatively strong and sales prices jumped at the beginning of the year, it is clear that the cooling of sales is coming. Both demand and sales prices are slowing down, which corresponds to the demand for rental housing. There is an enormous increase.

We observe this through various indicators on our Bezrealitky.cz platform: for example, how quickly rental ads disappear, the number of accounts that people open to communicate with the number of apartment owners, or in the messages sent, which rose about fourfold. These are all signals that the rental market will grow.

Even apartments intended for rent will not be as warm on our portal as before. By default, 50 percent of rental apartments are rented within 14 days, when this indicator falls below ten to 10 days, so the market is really hot. And for comparison: the best apartments for rent with us today will last only a few days – as soon as we display them, we will take down the advertisement again, the best apartments have up to 300 requests for an advertisement.

What is causing this change?

These are several factors together. One of the main ones is the availability of mortgages, which reduces and will further reduce: on the one hand, interest rates and the amount of own funds that you have to deposit when applying for a mortgage are rising. On the other hand, the impact of the refugee crisis is pushing – Ukrainians who have found work here are looking for rent here, which also reduces the availability of rental housing and leads to rising prices.

Does the trend of rent growth mean that department store prices will fall?

From our data, we can see that house prices, for example in Prague and its surroundings, are no longer rising and there has already been a decline in recent quarters, which will continue in the future. Personally, I think that smaller properties will retain their value and will still be a hot commodity, which when it comes to market, it will relatively quickly.

However, larger properties, houses and apartments, will have more and more problems when selling: the length of the sale will increase and at the same time the sellers will have to deal with the sale price a bit. These are now overexposed, they are derived from the vision of long-term growth, which is already ending in the segment of large real estate. Although I do not expect price drops of 20 percent, more expensive real estate will certainly make some downward correction soon.