The average price of an older apartment in the Czech Republic saw a further decrease. In the third quarter, an older apartment could be purchased for an average of CZK 84,782 per square meter, 4.5 percent cheaper quarter-on-quarter. Rents are growing, having risen by 14 percent year-on-year. This follows from a study by the European Housing Services (EHS) real estate group, which uses data from its founding members – real estate services Bezrealitka and Maxima Reality.
An older apartment in Prague was offered for an average of CZK 115,578 per square meter in the third quarter, but in September the price fell to CZK 112,710 per square meter. This is a decrease of 4.7 percent compared to the second quarter and at the same time almost the same as a year ago. Prices in Central Bohemia fell by three percent in September, where a square meter cost an average of CZK 70,685.
Apartments in Brno and South Moravia fell by eight percent in September to CZK 88,078 per square meter. According to EHS, the same price was here last winter. Compared to the second quarter, prices in Ostrava and the Moravian-Silesian cities fell by ten percent (CZK 40,353/sqm), and the prices of older apartments in the Králové Hradec Králové (CZK 57,862/sqm) and South Bohemia (CZK 50,328/sqm) regions fell by 14 percent.
The average prices of family houses are falling faster, by almost ten percent to 47,159 crowns per square meter in the third quarter and to CZK 42,652 per square meter in September. In the South Moravian Region, the quarter-on-quarter price per square meter decreased by 17 percent to CZK 41,492 in September. In the Moravian-Silesian Region, the price dropped by 40 percent to CZK 34,531 per square meter. The Central Bohemian region saw a 14 percent drop in house prices to CZK 54,614 per square meter.
“As impressive as the declines look, it’s important to remember that the market is still reacting to the record second quarter of this year, when many households took out last-minute mortgages and bought at prices that were demonstrably inflated. Now the market is in the exact opposite situation , loans are record expensive, interest in them is falling. Likewise, the costs of running a house or investing in renovations have increased,” said Vladimír Zuzák, director of Maxima Reality.
According to the survey, most properties are listed for more than three and a half months and do not sell even after repeated discounts. “There is a situation where, from his point of view, the owner offers a significantly reduced price, but still has no chance of selling. The average prices will drop again by then and he is again overpriced compared to the expectations of interested parties,” said Hendrik Meyer, CEO of EHS. The study states that in most cases the prices are inflated by 15 to 30 percent.
Rent prices are rising, the most in Prague and Ostrava, where they increased by 18 percent year-on-year. In Prague, at the end of September, rental prices reached an average of CZK 322 per square meter of rented space, which is six percent more than in the previous quarter. In the Central Bohemia region, they rose by five percent quarter-on-quarter to CZK 238 per square meter. In Brno, with a seven percent increase compared to the previous quarter, they increased to an average of CZK 276 per square meter.
Rent prices will probably continue to rise. “Each new contract concluded will be at a significantly higher price than the previous one. Given that the rental cycle in the Czech Republic is calculated for several years, we will feel the effects of price increases in a significant increase in rents for at least half a decade,” estimates Jan Škrabánek, director of Bezrealitka.
Source: EHS, Bezrealitka, Maxima Reality and CTK
