The average 65-metre flat in the Czech Republic would be paid for in 24.8 years based on the current rent in the second quarter, five months faster year-on-year. In the period before the coronavirus pandemic, it was 19.5 years, and in the spring of 2022, after property prices skyrocketed, 30 years. The analysis is according to an analysis by the real estate portal Bezrealitky.cz and is based on a simplified model comparing current rental prices and apartment prices. The calculation does not take into account any additional costs for the operation of the apartment or the assumption of an increase in rents or real estate price growth.
The national value is illustrative according to the analysis and there are more significant differences in the regions. According to the simplified model, the northern regions of the country continue to see the fastest return on investment. In the Ústí nad Labem region, an apartment is paid off in rent in 16.5 years, in the Karlovy Vary region in 19.4 years and in the Moravian-Silesian region in 20 years.
On the other hand, the flats in Prague will be paid off the latest, where the money will be returned to the investor in 29.1 years. This value is stagnant year-on-year. Prague is followed by the South Moravian Region, where the apartment is paid off in 26.8 years. According to the analysis, the return on investment in Brno has increased the most year-on-year, by almost a tenth. Hradec Králové and the towns in its vicinity rank third. According to the simplified model, apartments in this region earn their return in 24.9 years.
According to Martin Ponzer, Bezrealitka’s executive director, it is not possible to look at the coefficient of return in such a simplistic way. The data is interesting, he says, mainly because it can reveal the disparity between the price of the property and the rent in the market. The figures therefore indicate where the price differential is pushing property values and rental levels upwards or where, on the contrary, there is a harbinger of an equilibrium situation. In the Czech Republic, he said, prices and rents are now in equilibrium, with a few exceptions, and this may last for some time. The biggest disparity is in the Zlín Region, Vysočina and Moravian-Silesian Region.
According to the latest data from Deloitte, the average rent in the Czech Republic was CZK 295 per square metre in the first quarter of this year. The monthly rent of a 60 sqm apartment would cost CZK 17,700 without fees. The average selling price of an apartment in the Czech Republic was CZK 95,000 per square metre in the fourth quarter of last year.
The analysis of the Valuo.cz portal shows that prices of flats are starting to rise again after declines last year. Although prices in Prague are more or less stable, in Karlovy Vary and Ostrava prices rose by more than nine percent year-on-year in the first quarter. Only Jihlava and Ústí nad Labem recorded a slight decline. The peak prices of flats were reached almost exclusively in the first half of 2022 and against these values, with a few exceptions, the current prices of flats recorded a decline of up to 21 per cent. Currently, prices are comparable to the levels of the end of 2021.
Source: Bezrealitky.cz and CTK
