Despite price fluctuations and deteriorating mortgage availability, the construction of single-family homes in the Czech Republic is still a very stable sector as of 2018. Each year around 18,000 of these buildings will be added to our territory. And it looks like this year will be no different. “The interest in owning a single-family house is still strong and this year the construction of single-family houses will again be around the level of last year,” says Peter Markovič, CEO of Xella for the Czechia and Slovakia.
According to the Czech Statistical Office (ČSÚ), the greatest interest is in brick houses, both brick and aerated concrete. However, together they account for 80 percent of new builds. In the last four years, however, the interest in wooden constructions has been gradually decreasing. Last year “only” 2,645 were built, the lowest number since 2018. The lowest demand is for prefabs and panels.
While residential construction of single-family homes and apartments is still very strong this year, experts predict a slight decline in interest in the following year. “Higher prices, expensive energy and high mortgage rates have a negative effect on the market. As for the higher price of materials, builders approach construction with greater caution: they seek savings, discount their requirements, build with their own. help, they emphasize energy efficiency or alternative energy sources, “explains Markovič. According to him, those who have just decided to build consider their steps much more.
The cheapest was in Ostrava and Ústí
Families who are considering buying an apartment instead of a detached house may be happy that the prices of these properties continue to drop slightly. After all, it has already started in April of this year. The latest statistics from the third quarter show that, for example, candidates in Ostrava will pay five percent less and in Brno four percent less. In the capital, prices fell by two percent. The only non-negative value was recorded by Olomouc, which stagnated in this regard.
“Although in the second quarter prices still symbolically increased – for example in Pilsen – or stagnated – for example in Ostrava -, the current inter-quarter statistics already show a clear development of the trend”, says Lumír Kunz, CEO of FérMakléři.cz. As for specific amounts, apartments in Prague were sold at an average of 125,000 per square meter between June and September, which is 3,000 less than in the previous quarter. In Brno, prices fell from 100,000 to 89,000 per meter.
The cheapest apartments can currently be purchased in Ústí nad Labem and Ostrava. In these areas, interested parties can buy a square meter for 40 and 46 thousand crowns. “It is interesting to note that even the regions where prices were low and the growth potential therefore had to decline. We attribute this to the significant unavailability of mortgages, widespread throughout the Czech Republic. This factor therefore prevails over regional influences.” , says Kunz.
Despite the drop in prices, the apartments are still much more expensive than the previous year. For example, 18 percent less were sold in Olomouc a year ago than today. The cheapest was Brno, where it cost four percent less. Prague records a year-over-year price increase from 117,000 crowns to 125,000 per square meter, which corresponds to an increase of seven percent.
The discount will continue
Although the final price of the apartments for this year will only be shown in the last quarter, according to experts the discount trend will continue. It is said that the mortgage sector should also develop positively. “It seems inflation in the Czech Republic he is already tired and begins to decline. I dare say that in March 2023 we will have inflation around six percent. At that point, the repo rate at the seven percent level will not be adequate. That is why I believe we will reach between three and four percent “, explains Jiří Pathy, CEO of Gepard Finance.
“As the market recovers, all demand will return to it. Czechs are historically bound to own. The market is currently facing so-called deferred consumption, not a change in people’s behavior,” he concludes.
