Dear Prague. Local flats are the least affordable housing in the EU
Housing costs have been growing significantly faster than earnings in the long run. Since the beginning of 2015, apartment prices have jumped by 136 percent, wages by only 41 percent. The availability of your own apartment in Prague is the worst of the surrounding metropolises.
“The growth rate now only copies Bratislava, where 14.8 average gross wages are needed. On the contrary, in Berlin, Vienna or Warsaw, people will reach the new apartment the fastest, in about nine years. In comparison with Prague, in almost half the time, “describes the executive director of Central Group Michaela Tomášková.
According to the international database Numbeo, which monitors the situation in almost 11,000 cities around the world, housing management in the Czech Republic is the most expensive in the entire European Union. “According to the latest Eurostat data, real estate prices rose by almost 26 percent last year, the largest increase in the union. Along with the growth of interest rates, the management of one’s own housing has thus become more distant again, “said Tereza Hrtúsová, an analyst at Česká spořitelna.
Why is housing so expensive in the Czech Republic?
The Prague market has probably already had the biggest price drop. “After four years of continuous sales growth, we expect a significant decline this year. The significant decline is due to the high comparison base set by last year’s record year, “explained Central Group owner Dušan Kunovský. “Interest in new flats continues, but there has been a significant decrease in mortgage buyers and also foreigners,” Kunovský added, adding that this year, according to estimates, prices will rise to a maximum of ten percent.
Last year, a record 7,450 new flats were sold in the metropolis, which was the most in modern history. This year, the Central Group predicts that sales will stop at around 5,000 units, and a number of developers will continue to support their sale of various bonuses.
“The residential market is facing enormous uncertainty,” Kunovský said. High inflation, which is not only an increase in construction costs, is to blame, but land prices and mortgage and project rates are also rising sharply.
“Due to unpredictable developments, some are already postponing or even selling their projects to other investors. There are currently only about three thousand vacant new flats on the market. Previously, the usual number was double, “stated Kunovský.