Advertising services manager Sreality.cz Hana Kontrišová confirmed to the news that real estate prices are still rising.
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“According to the data of the Sreality.cz Price Compass, the year-on-year comparison of price developments in the first quarter of this year shows the development of offer prices of privately owned apartments in very good condition with an area of 40 to 60 square meters by about four-fifths in Most, Pelhřimov and Český Krumlov. Large cities also show increases, although they are very expensive per square meter due to the location. So real estate prices are still rising, “she said.
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If someone is in no hurry, now is the least time to take out a mortgage and buy an apartment. In a year or a year and a half, the situation will be better
David Marek, chief economist at Deloitte
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Flats in Prague in very good condition with an area of 40 to 60 square meters have risen in price in the last six months (compared to the previous year) by eight percent, and by ten percent in Brno.
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“In Ostrava, the increase was about 14 percent. Despite rising interest rates, people are still investing in their own housing, although prices in large cities are already hitting the ceiling of the purchasing power of ordinary citizens, “added Kontrišová.
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Interesting properties will be sold in a matter of days
Sreality.cz currently has 66,000 ads on offer. Most offers are from Prague, Central Bohemia and South Moravia, with more apartments available each month. “The apartments are advertised on the website of the most visited Czech real estate portal Sreality.cz for a period of 35 days. However, it is important to add that interesting real estate offers that are sold at a good price or are exceptionally well designed, situated, etc., disappear from our portal within a few days. Family houses are advertised for about 50 days on average, “added Kontrišová.
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According to RE / MAX real estate broker Milan Vršecký, selling a property is not a problem either. “Permanent housing is still on the course. Recreational properties are also on the rise. The reason may be the situation in Ukraine, but also the recent pandemic situation, “he told Novinky.
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However, with less lucrative offers, the sales time is extended. “Half a year ago, every second property on offer was sold within a month. Now the period has been extended to three months, “added Vršecký.
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They want to sell quickly as long as at least part of the market is still willing to pay up to 30 percent of the burned-in price
Lukáš Kovanda, economist
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According to economist Lukáš Kovanda, some real estate agents still report a certain freezing of the real estate market. “However, it is possible that this is only a temporary shock from the Ukrainian war and the associated dramatic inflation. In any case, buyers who do not need real estate right now, I recommend waiting for a while until the situation around the war and sanctions crystallizes, perhaps in the second half of this year. If, in the end, despite the war, real estate prices become more expensive in the coming months, it will be a much slower price increase than the one that occurred during the pandemic, “he wrote to Novinky.
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Kovanda: Developers are bluffing
According to Kovanda, the words of developers that further significant price increases will come are driven by the fear that there could be more permanent stagnation. “They want to sell quickly as long as at least part of the market is still willing to pay up to 30 percent of the burnt price. Stagnation or only a slight increase in the prices of residential real estate in the next twelve months can definitely not be ruled out, “Kovanda remarked.
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According to him, the standard of living of households will not deteriorate, which they have not remembered for the last thirty years. “The huge cost of food or energy will take away the money they could potentially put into their own homes. In addition, mortgage interest rates will rise to record levels in the last almost a quarter of a century, “predicts the economist.
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Mortgages are expected to fall in price over the next two years. “The significant economic downturn and the decline in people’s living standards associated with high interest rates will suffocate the economy and make it necessary to support it next year and next year by lowering interest rates from the central bank and market players,” Kovanda concluded.
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According to David Mark, the first signs of a slowdown in price growth are still appearing. “So far, we are seeing this in the marginal segments, such as the sale of holiday cottages, cottages and other real estate. Residential housing will be in high demand, fueled by the savings created during the pandemic. The fact is that the supply of real estate is still lagging significantly behind demand, however, the rise in prices will no longer be as dramatic as last year, when real estate prices rose by as much as a quarter, “he told Novinky.
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The increase in mortgages will not force the Czech Republic to sell
“The CNB’s monetary policy is intended to discourage people from rushing to the market now. So that the market is not so overheated. If someone is in no hurry, now is the least time to take out a mortgage and buy an apartment. In a year or a year and a half, the situation will be better, “added Marek.
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At present, mortgage rates are around five percent, but according to Mark, they will continue to rise. “The Czech National Bank is likely to tighten monetary policy. So that should cool demand, and thus the growth of real estate prices, “says the economist, adding that rates could climb up to six percent.
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Prices are 20 to 30 percent overshot. There may be a correction that will change this disparity. Real estate is not guaranteed that their prices will only rise
David Marek, chief economist at Deloitte
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Such high rates could last until next year, when inflation is predicted to start falling. “This would untie the hands of the Czech National Bank, which could turn the helm of monetary policy from the middle of next year,” Marek expects.
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It will not be sold
Marek does not assume that people will start getting rid of their real estate due to expensive mortgages after the end of the current fixation. “The possibility is that people will agree with the bank to extend the maturity of the mortgage, which would reduce the individual installments, because they would be spread over a longer period. Most people become modest, postpone their vacation, postpone buying a new car, focus on key expenses and forgive everything that is not necessary, “he told Novinky.
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Broker Vršecký sees the future in a similar way. “We are in a changing market. There will be a minimum of those who will be forced to sell due to price increases. People also perceive their property as an investment to save money. If real estate starts to accumulate in the offer, buyers will be able to choose according to quality and, of course, price. Sellers will have to adapt to the market. So far, here in the north of Bohemia, a quality offer with a real market price disappears from the offer almost immediately, “the broker added.
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Marek believes that real estate prices could fall over the years. “Prices are 20 to 30 percent overshot. There may be a correction that will change this disparity. Real estate is not guaranteed that their prices will only rise, “he added.
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