The repeated tightening of conditions for the provision of mortgages is slowly beginning to change the habits of acquiring real estate. Representatives of real estate agencies and companies stated that people are starting to buy them more often with money from their own resources. According to analysts, another rise in mortgages was caused by Thursday’s increase in Czech National Bank rates. Its bank board raised the key interest rate by 0.75 percentage point to 5.75 percent. The base rate was so high last time in 1999.
The real estate company RE / MAX stated that its brokers are experiencing a decrease in mortgage applicants and an increase in cash purchases. “We do not currently know the specific shares of payments from mortgages and own resources, but interest in mortgages is definitely declining. People buy more from the money they most often inherit, from the sale of other real estate, or they want to protect their savings from inflation,” company spokeswoman Dagmar Schejbalová.
By default, more than half of clients finance the purchase of apartments with JRD by mortgage. Also for this company, the share of those who buy for cash is now increasing. “We are registering a slight increase in clients with their own financing. For example, the reservation contracts we concluded in the last month were mainly with those who wish to finance from their own resources,” said JRD owner and founder Jan Řežáb.
According to experts, people are starting to be more careful when looking for mortgages. “It is clear that households are now considering all alternatives, comparing whether a mortgage will still pay off for them at all,” said Jan Škrabánek, General Manager of Real Estate Services Bezrealitky. According to him, the interest in a mortgage calculator, which allows you to compare the availability of a mortgage for a given property, has more than tripled.
Some clients will not reach the mortgage after the price increase. “Currently, we record 50 percent of clients who use mortgages to buy an apartment. We assume that approximately fifteen percent of them will be affected by this change,” estimated YIT Stavo sales director Dana Bartoňová.
According to Hendrik Meyer, CEO of European Housing Services (EHS), real estate companies will have to come up with a solution that will allow them to finance the purchase of real estate even when their prices continue to rise and mortgages cease to function as the most universal financing tool.
“Otherwise, real estate transactions will start to falter. Very soon, there will be a discussion on two-generation mortgages, as well as new models that will use private investor money instead of bank money,” Meyer said. According to him, the solution may be greater interest in rents.
“We will get closer to the models known from the West – a smaller share of private owners and a greater influence of corporations with large portfolios of rental apartments,” Meyer added. For example, this year, Trigema will open 250 fully equipped apartments for rent opposite the Invalidovna in Prague 8 in the Fragment project.
Source: CTK
