Money only: The housing market took a breather, but the future warns – Seznam Zpravy

In the first five months of this year (no more recent data is available at the time I write this newsletter), builders across the Czech Republic put 14,850 new apartments on the market. Although last year it was a little more, at least, the offer in the last three years during this period is about 15 thousand apartments, which is the most in the 14 years ‘ gone.

On the sensitive market of Prague, the newest apartments were completed this year since 2011, according to the CZSO, it was more than three thousand by the end of May. Sales are also strong. According to an analysis of the startup BuiltMind, 1,466 new apartments were sold in Prague in the first quarter of the year, demand rose seven percent quarter-on-quarter and 85 percent year-on-year. Similar numbers have been reported by Central Group, according to which there were sales of around 1,600 apartments in the first quarter.

According to reports that have not yet been officially confirmed that are circulating among developers, sales in the second quarter are around 1,900 new housing units. The supply of apartments available in the capital is growing slightly overall.

Of course, we are still far from the desired state, when eight to ten thousand new apartments would come to the Prague real estate market every year, which should theoretically balance supply and demand. The offer is strengthening, there is no doubt about that. But the prices do not match it.

The real estate market has experienced a two-year boom, caused by the rise in interest rates. This year there is a revival, at the beginning of the year loans began to become cheaper, the Czechs returned to the banks and again interest in mortgages is growing. Banks indicate that it is due to the spread of mortgage rates they don’t intend to do too much, but the request that has been delayed for two years is doing its job: There is a need to stay and interest in apartments is rising. Prices rise with it too.

According to the Deloitte Real Index, apartment prices in the Czech Republic rose four percent in the first quarter of this year compared to the end of last year, and in Prague, a square meter is sold already for an average of 124.9 thousand crowns. And how it was recorded and updated regularly index List of Messagesthe availability of apartments in our country has been declining again since the end of last year after a more favorable change.

Such numbers confirm a well-known, but overlooked fact: Increased construction alone will not ensure better housing. Other factors play a role in the particular housing market.

It doesn’t get any better for those interested in housing the future. In terms of prices, we expect further growth. It will be driven not only by demand, but also increasingly by requirements for the energy efficiency of buildings. These are provided by the European directive, which is intended to ensure that the objectives of the EU Green Deal are met.

Anyway – on the Czech media scene two weeks ago he released a terrible accident, when the government was supposed to approve a set of documents confirming the Czech disarmament strategy, which, among other topics, also concerns housing. In the end, the cabinet was afraid of the interesting views of the general public and postponed the discussion on the “Czech Green Deal” for the time being.

However, this does not change the conditions that new buildings designed today must meet. They are determined by the aforementioned European directive on the energy efficiency of buildings, which was adopted by the European Parliament and the Council in May, and Czech legislation is beginning to be implemented.

The guidelines state that all new buildings, both residential and non-residential, must have zero emissions from 2030. So they should be heated with heat pumps, they should be equipped with photovoltaics and chargers for electric cars, they need high-quality insulation or thermally impermeable windows.

Already today, developers are starting to take into account the new conditions when preparing for further construction. According to the first estimates, greendeal requirements will make the buildings completed at the beginning of the decade more expensive by 20 to 30 percent compared to today. It will also be more expensive to run homes, because the management of energy systems (heating, cooling, ventilation, shading, etc.) will be more complex than today.

This will of course be reflected in house prices. Therefore, I really do not understand why there was so much commotion a few days ago about the strategic documents of the “Czech Green Deal”, which, apart from the National Plan climate and Energy, binding for the Czech Republic, while as already agreed and therefore necessary for the member states, the EU directive for buildings it does not appear in the public debate and is still a a boring subject best reserved for energy planners and engineers. But that’s how it goes in our country with European legislation.

But, back to the housing market. This year’s housing numbers are very different from macroeconomic reports about the development of the Czech construction industry. According to the latest data from the CZSO at the end of May, construction output in our country fell 6.8 percent year after year, and economists are talking about a crisis in the sector. It is a warning, as the construction stock is an indicator of the state of the entire national economy.

The builders themselves are shaking their heads at rumors of a crisis: “I don’t see any crisis in practice and I suspect that the CZSO has the wrong method of collecting data,” said manager of a large development group in Prague last week.

We can discuss how to assess the current state of his business. But when we look to the future, there is a real problem. The statistics of issued building permits indicate that there will be less construction than today in the coming years, and that even the housing market in Prague and some other cities will touch moderately. another over quickly.

And this despite the fact that the number of apartments prepared by developers in the capital has been growing steadily in recent years. According to a recent study by Central Group, there are currently 145,000 apartments under construction, ie five thousand more than last year. Or a third more than five years ago.

According to the CZSO, the number of building permits issued in our country has been decreasing since the late 1990s, and last year it reached only half the number since 2004. From the beginning than a thousand years, there have never been so few new people. licensed apartments in the Czech Republic. Licenses for non-residential buildings have declined for ten years. People from the industry complain that there is an intractable bureaucracy and dysfunctional spatial planning behind it. Politicians have been repeating for years that they know about the problem and will fix it. Governments change and nothing happens.

The latest step that is expected to shake up the construction process is the new construction law, which came into force at the beginning of July at the same time as the digitization of the construction process. Both from the workshop of the pirate Minister for Regional Development Ivan Bartoš, whose political neck could be broken by the new legislation. After a month of launch the system is malfunctioning. Officials complain that it is out of order and that they do not have time to prepare for it.

Hiccups were expected at the time of commencement, so the construction authorities are overcoming it further an unprecedented wave of demandswhich the builders put in at the last minute, so they could still finish it.

The Union of Towns and Cities warns that the turmoil surrounding the new law and digitization will not only speed up the building permit process, but even a long delay. It is said that the offspring can reach up to two months and a financial value of 100 billion crowns.

I take similar statements with a grain of salt, as the building regulation debate is highly political. But if the storm at the construction authorities is not settled, it is not good for the property market.

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