Builders do not have workers and rising prices may lead to a declining interest in real estate

7 January 2022

Lack of labor remains a problem in the Czech construction industry. In addition, rising inputs make building construction more expensive, which can lead to a decline in interest in buying real estate. According to data released today by the Czech Statistical Office (CSO), construction output in the Czech Republic slowed year-on-year growth to two percent last November from 3.7 percent in October.

According to BHS chief economist Štěpán Křeček, “it is necessary to employ foreign workers in the construction industry. “In the future, it is appropriate to support the issuance of work visas for people from culturally related countries, which would be extended only if employers are satisfied,” Křeček said.

UniCredit Bank’s chief economist Pavel Sobíšek pointed out that the current conflicting situation in the industry is reflected in the industry’s results. “On the one hand, the demand for construction work is growing strongly. On the other hand, the growth rate of construction output is not in line with the increasing demand,” he said.

“The question is whether administrative delays in awarding contracts or their completion due to lack of materials and staff are a bigger problem. At least for the second type of problems, there is enough evidence in the numbers,” Sobíšek added.

According to Křeček, expensive building materials, high labor costs and rising land prices are making building construction more expensive. “This creates pressure on the growth of new real estate prices. This, combined with the increase in the price of mortgage loans, may lead to a reduction in people’s interest in buying new real estate,” Křeček said.

However, the results of the EMA data survey for Lusq, which focuses on the online purchase of investment flats, suggest that as many as 66 percent of Czechs are now considering investing in real estate, while 12 percent consider real estate to be the best choice for valuing their finances. “The real estate market is experiencing an incredible boom and the Czechs are buying literally anything – houses, flats, cottages, land,” commented Milosus Lafek, CEO of Lusq. The survey was conducted on a sample of 1,044 respondents across regions and social classes.

Source: CTK