Prices of flats in the fourth quarter of 2022 fell in quarter-on-quarter comparison for the first time since the beginning of 2013, by an average of 0.7 percent. The real estate market continued to decline. Demand for both apartments and single-family homes continued to decline slightly. Only land remained stable, as did price growth. This is according to the HB Index by Hypoteční banka, which belongs to the ČSOB group.
The HB Index is based on realistic estimates of market prices of real estate purchased by clients of Hypoteční banka through a mortgage loan. The bank first published the index in April 2011.
“The last quarter of 2022 symbolically completed the development of the second half of the year in particular,” said Martin Vašek, Chairman of the Board of Directors of Hypoteční banka and ČSOB Stavební spořitelna. According to him, high loan prices and their lower availability, combined with the overall economic situation, led to a further cooling of the market.
The rate of price growth has also slowed further for detached houses. In a quarter-on-quarter comparison, it fell from 2.6 to 1.8 per cent. Only land maintained its momentum, with prices rising by 4.5 per cent.
For flats, the outflow of demand continued as in the third quarter. “For the full year 2022, we are seeing a 30 per cent drop in interest compared to the previous year. The demand for apartments in the 3+1 and 3+kk category decreased the most,” Vašek pointed out. On the contrary, high interest rates and a reduction in the availability of apartments have led to an increase in interest in rental housing. As a consequence of lower demand, the number of available apartments on the market has increased by 100 percent compared to 2021.
House prices have fallen across all regions. The Karlovy Vary, Moravian-Silesian and Central Bohemian regions recorded the largest average price decreases (by two per cent). In Prague, on the other hand, prices have remained rather stable so far. The outflow of demand has also affected new projects, where prices are rather stagnant. Uncertainties in the future development of both real estate and construction prices are leading developers to suspend the launch of new apartments on the market in selected cases.
Demand for family houses has also fallen significantly, while demand for holiday properties has almost frozen. “There have been no major changes in single-family homes. Demand is falling and with it the rate of price growth is slowing. Interest has shifted to smaller, more economical properties, while it is very difficult to sell larger houses without renovation,” Vašek said.
The reduction in demand has had a positive impact on solving problems with building materials, he said. Most construction is taking place in the Central Bohemia region and around Brno. It is also possible to register an increase in interest in mobile homes, container houses or modular wooden buildings, Vašek added.
For land, although the price growth slowed down very slightly between quarters, it was land that recorded the highest increase of 22.2 percent for the whole year. For price reasons, there is growing interest in locations that are less accessible and further away from big cities. There is also interest in land that has certain restrictions for the construction of a classic family house, but allows the construction of a so-called mobilheim or a building for temporary housing (a building with a registration number).
