Prices of older flats in the Czech Republic mostly fell year-on-year in the fourth quarter of last year, while in Prague they remained at the same level and in Olomouc they rose slightly. An analysis by FérMakléři.cz, which cooperates with more than 100 real estate brokers, shows that the decline in prices of older flats will continue.
According to FérMakléři.cz, a square metre of an older apartment in good condition or after reconstruction in Prague cost CZK 120,480 at the end of last year, while a year earlier it was CZK 397 more expensive. An 85-square-metre apartment could be bought for around CZK 10 million.
In Brno, the price per square meter dropped by about 6,000 crowns, which was six percent. Prices rose only in Olomouc, to CZK 71,152 per square metre, a six per cent year-on-year increase. However, the movement of prices between quarters also in Olomouc shows cheapening, according to FérMakléři.cz.
The prices of older flats fell the most year-on-year in Ostrava, by seven per cent, while in 2021 there was one of the highest year-on-year price increases (20 per cent).
The further development of prices of older flats, probably a further decline, will affect the state of the mortgage market. If mortgage rates return to at least four per cent, people will start selling and buying again in larger numbers, said Lumír Kunz, managing director of FérMakléři.cz. He added that the real estate market will be looking for a new balance this year, which will be different with regard to the type of property.
Zdeněk Václavek, managing director of M&M real estate, said that the real estate market has fallen by about 50 percent year-on-year and some real estate agencies saw transactions fall by up to 70 percent in the fourth quarter.
Václavek added that the seller has to invest tens of thousands in the presentation of the property to reach the largest number of interested buyers. “Yet many owners – or the real estate agencies that represent them – were the first to cut off marketing costs in the last quarter, because they simply do not have the money to invest in promoting the contracts. Thus they stop selling and that is the beginning of the end. From my point of view, this threat is hanging over tens of percent of real estate agencies,” said Václavek.
Source: FérMakléři.cz, CSU and CTK
