Verejek was poor in terms of data, so there is room for a return to the Financial Stability Report, which was issued by NB last week. As always (it comes out regularly twice a year), there are a lot of interesting shows and observations. Traditionally, these are, for example, NB’s estimates regarding overvalued real estate prices and the likely further development of these prices.
Now that you are overestimated, NB I use two different estimation methods. Until 2022, both methods gave a very similar result, but from 2022 they diverged quite a bit (the latest data are from the second quarter of the summer year).
It cannot be said that one method is more reliable than the other, so let’s settle for the average result of both methods: it is such that the overvalued real estate price decreased in 2h22 and 1h23, while this year it reached somewhere between approx. 25 and 65%.
As threatening as this is, NB does not expect a sharp drop in these prices. On the contrary, experts of the central bank see the end of the fall in real estate prices in the winter and expect even a slight growth (at a rate of up to 5%) for the fifth year.
I personally do not have a sophisticated prognostic model of the development of real estate prices. One (miserable) way to do without it is to look back to the past, i.e. to the development of real estate prices after their peak in late 2008.
At that time, real estate prices fell by approximately 7 percent within 12 months (ie until the end of 2009), similar to what happened at least according to some price indicators this time, i.e. from the peak in the first half of the year to the middle of this year. During 2012, these prices dropped a little and then stagnated until the end of 2013, i.e. after those years.
If the same thing happens this time, then we should expect real estate prices to stagnate at the current level (or even slightly) until 2027.
Michal Skoepa
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2023-12-21 08:48:20
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