Czechs are paying off their mortgages in an exemplary manner, but they are waiting to take out new ones. The revival of the mortgage market and apartment sales will come in the spring
The number of people taking out a mortgage to buy a flat has dropped significantly this year. Those who were considering it have postponed the decision and are waiting due to high interest rates. Raising rates, the new level of which the CNB is deciding on today and issuing its current forecast at the same time, has slowed down sales of new flats. However, inflation rising to 20%, more expensive housing loans and the general rise in the cost of living have not yet affected the Czechs’ ability to repay their loans.
According to data from the Czech Banking Association (CBA), the share of overdue mortgages has fallen to a record low since the beginning of the year. In August, it was 0.59 per cent. However, more expensive energy, for example, has not yet begun to fully penetrate household costs.
But no crisis lasts forever. A market recovery can be expected in the next two years. And in two waves. The first, milder recovery will come in the spring of 2023. Spring tends to be the strongest time in the housing market. A major recovery will then take place in 2024, with mortgages expected to return to “normal”, i.e. to the psychological threshold of 3%.
This will bring the market back to normal. Deferred demand will be in full force and new home sales will surge again. Maybe even to new records. There is and will be an enormous demand for housing in Prague. It is just waiting for now.
Source: CENTRAL GROUP
Photo: CENTRAL GROUP
