House and new home prices will rise again. According to a study by the analytical company CEEC Research, more than eighty percent of development companies intend to increase the price of new projects. On average, the price could grow up to seven percent a year.
Half a year ago, a fifth of the development companies planned to raise prices. At the same time, they expected apartment prices to increase by “only” 4.6 percent on average.
“After about two years of stagnation, new house prices have returned to growth this year. Offer prices in Prague have even broken their previous highs. For this year and next year, I expect that the price of new houses will continue to rise,” said Dušan Kunovský, founder of Central Group.
The offer is not enough
According to experts, the reason for the increase in prices is the growing demand, which is no longer enough because the supply of housing on the market is stagnant. In the second half of this year, according to a study published on Thursday at the Meeting of Czech Construction Leaders, interest in new housing in the entire Czech Republic should increase by five percent.
The development is influenced by the reduction of interest rates by the CNB and subsequent mortgage discounting. “They are gradually coming to the market and will continue to acquire projects that were stopped during the high mortgage prices. The gradual reduction in rates is visible throughout this year and I assume it will continue in the future,” said Michal Hrbatý, director of the Ulov Domov company.
An increase in the availability of mortgage financing will mean a renewed interest in buying properties and, with it, an increase in their prices.
According to David Šiller, commercial director of the Wood system, a similar situation in the supply sector will continue into the next year. However, the current problems with building permits will gradually begin to be reflected in the market.
“It will depend a lot on how long it takes to correct the current digital situation. On the other hand, demand will continue to increase, because the housing shortage and housing crisis have not disappeared,” said Šiller during the debate.
Developers are going to build
Although problems with the digitization of construction management could gradually begin to be ordered in the offer, this year and next year the number of new houses for sale could still grow.
According to developers who participated in the CEEC Research study, the supply of real estate will increase by 2.5 percent compared to the first half of this year. The outlook is even more positive for the first half of next year, as supplies are expected to grow another 3.8 percent.
“In the long term, the state of supply can be characterized as continuous and sufficient, especially in large cities, but in this respect I am a little optimistic for next year and I expect an increase in supply. If we make a comparison in the first half of this year, when we recorded a large increase in sales, and therefore a large emptying of the offer, there may be an increase in comparison with that period next year, even in tens of percent,” said Jan. Řežáb, owner of JRD Group.
At the same time, he said that the decision of developers to launch their big projects, which are now being prepared, will have a big impact on the numbers.
2024-10-10 14:00:00
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