The number of flats sold in the Czech Republic in the first quarter of this year was the lowest in seven years. Their price fell by 2.5 percent quarter-on-quarter, significantly more than in the last quarter of last year. This is according to the HB Index provided to today by Hypoteční banka, which belongs to the ČSOB group. Prices of flats in the fourth quarter of 2022 fell for the first time since the beginning of 2013 in quarter-on-quarter comparison, by an average of 0.7 percent.
The HB Index is based on realistic estimates of the market prices of properties purchased by Hypoteční banka’s clients through a mortgage loan. The bank first published the index in April 2011.
“Not only is the gradual decline in the prices of homes sold continuing this year, as in the previous year, this trend is gathering pace in the first quarter of 2023. According to our data, the volume of apartment sales on the real estate market is the weakest in seven years,” said Martin Vašek, CEO of Hypoteční banka. According to him, sellers often find that they cannot sell flats so easily without a discount.
The price drop applies to all regions. Prices fell the most in the Moravian-Silesian (4.3 per cent), Pardubice (3.2 per cent), Olomouc (3.1 per cent), Ústí nad Labem (2.9 per cent) and South Bohemia (2.8 per cent) regions. However, Prague also recorded a price decrease of two percent. However, this is not so much an across-the-board reduction as individual discounts on purchases.
“Buyers are gradually accepting that a return to low mortgage rates cannot be expected yet. However, they are still being held back by relatively high property prices. The overall supply of flats for sale has stabilised relatively well, so there is no pressure to reduce prices even further,” Vašek pointed out. The first quarter of 2023 revealed mainly declining interest in apartments with a layout of 3+1 and 3+kk. Large flats with an area of over 90 sqm became cheaper at the slowest pace.
Also due to rising property prices, the demand for rental housing also continued to increase. However, investors’ interest in small flats is causing a gradual gradual increase in rents.
There is also a declining interest in the purchase of detached houses. It is most noticeable for larger family houses that have not undergone renovation. The reason for this is probably still relatively high energy prices. “Since last year, we have seen a steady growth in interest in financing energy-efficient housing,” noted Vasek
In contrast to the large and operationally uneconomical houses, there is continued interest in smaller and cheaper single-family homes and mobile homes, especially modular wooden houses and container homes. There is a dramatic drop in demand for holiday homes.
On the land market, demand continues to outstrip available supply. The price increases that began last year are continuing now. The biggest influence on the price of land is the size and shape of the land, transport and civic amenities, utilities, as well as the slope and orientation to the cardinal points. “As land prices are rising, we are seeing increased interest in land even in more remote locations from the outskirts of large cities,” concluded Vašek.
Source: Hypoteční banka and CTK
