The real estate market is expected to see a continued decline in apartment purchases, cottage sales and a further increase in demand for rental housing next year. Like developers, representatives of real estate companies interviewed by ČTK think that interest rates on mortgage loans will fall in the second half of 2023. Interest in real estate should then rise again, they said.
Robert Hanzl, CEO of Next Reality, said that in the second half of this year, prices fell by 20 to 30 percent. He expects the market to continue to fall in the first quarter of next year, but not as much. “Rather, it will be a slight correction and also prices of properties where sellers have not yet discounted will decrease,” estimated a member of the Association of Real Estate Agents.
In the last two years, the demand for real estate has been extreme, according to RE/MAX CEO Jan Hruby. Now the property sales market is returning to the level that was normal before 2020, he said. The supply of holiday properties, which were in extreme demand during the coronavirus pandemic, is likely to change, he said. “It can be assumed that some owners will want to sell their cottages or chalets,” Hruby said.
Sellers have to factor in longer listing times and often discount their idea of the sale price, said Century 21 real estate broker Michael Weber. Two categories of buyers in particular remain on the market, he said. “Those who don’t want to or can’t postpone the purchase of a property and those who see an opportunity in the current development. Price stagnation is also likely, and the decline could slow down from the second quarter of 2023,” Weber added.
Jan Škrabánek of Bezrealitka says that next year will be marked by price declines across the market. This will affect houses and apartments before renovation and in worse condition, holiday properties and less attractive locations. But he added that it is a good time to buy as owners are willing to haggle on price. “Those who buy cheaply today but with an ‘expensive’ mortgage will make a profit. In five years, when refinancing, they will get a better loan and the price of the property will rise,” Škrabánek said.
The unaffordability of owning their own home is changing the mindset of some people who have started taking up renting as a full-fledged housing option. Michal Hrbatý, the head of UlovDomov.cz, estimates that the Czech Republic could therefore come closer to Western countries in the next few years, where it is common for 40 to 50 percent of the population to live in rented housing, whereas in the Czech Republic it is currently around 25 percent.
According to Hanzel, the reduction of interest rates on mortgage loans will be crucial for the market. This can be expected around the middle of the year. For these reasons, we expect increased interest in real estate in the second half of the year and a slight return to market growth,” he said.
Lumír Kunz, CEO of FérMakléři.cz, said that the real estate market will be looking for a new balance in 2023, which will be different with regard to the type of property. For example, holiday homes and older apartments will be sold at significantly lower prices compared to 2022, he said. In contrast, we are still seeing a tendency for new apartments to hold prices. This can be seen, for example, in the behaviour of some developers who, instead of selling, are starting to offer apartments for rent, Kunz believes.
Source: CTK
