Year-on-year growth in house and apartment prices in the Czech Republic accelerated to 11.9 percent in the first quarter, and prices rose by 8.9 percent a quarter earlier. Among the countries of the European Union, growth was the fourth highest, as at the end of last year. Compared to the last quarter of 2020, prices increased by 4.6 percent. This follows from data published today by the European statistical office Eurostat. In the EU, prices rose by an average of 6.1 percent year on year.
“Inflation in the real estate market is not coming to an end and the hope that price growth will moderate remains very small. The trend of these prices has not been broken by either the pandemic or the recession associated with it, so it can hardly be expected that the situation may soon turn,” said ČSOB analyst Petr Dufek.
Housing prices rose in the first quarter in all EU countries except Cyprus, where they fell by 5.8 percent. They increased the most in Luxembourg, by 17 percent. This was followed by Denmark (by 15.3 percent) and Lithuania (by 12 percent). Prices rose the least in Spain (by 0.9 percent), Romania (by 1.4 percent) and Italy (by 1.7 percent).
Compared to other EU countries, real estate prices in the Czech Republic grew the fastest continuously from the last quarter of 2016 to the end of the third quarter of 2017. The highest growth was in the second quarter of 2017, when houses and flats in the Czech Republic rose by 13.3 percent year on year. Compared to the EU average, growth was more than three times higher at that time.
“Even if apartment prices in the Czech Republic only stagnate for the rest of the year, they will still be on average 8.4 percent higher than last year. On average, apartments are now 67 percent more expensive than they were in 2015. This means the third fastest growth in this period. housing prices in the European Union, right after Hungary and Luxembourg,” added Dufek.
According to Trinity Bank analyst Lukáš Kovanda, demand for real estate in the Czech Republic is still strong due to economic prosperity between 2014 and 2019, during which the purchasing power of the domestic population increased significantly and Prague in particular became even more involved in the global real estate market.
“The growth of real estate prices in the Czech Republic shows a long-term growing trend, which, in addition to the relatively weak supply, is fundamentally due to the ongoing process of macroeconomic convergence of the Czech Republic to richer European Union countries. This process will continue,” Kovanda added.
Sourse: Eurostat & CTK
