Year-on-year growth in house and apartment prices in the Czech Republic accelerated to 8.9 percent in the fourth quarter of last year, and prices rose by 8.4 percent a quarter earlier. Among the countries of the European Union, growth was the fourth highest, at the end of last September it was fifth. Compared to Q3, prices increased by 2.6 percent. This follows from data published today by the European statistical office Eurostat. In the EU, prices rose by an average of 5.7 percent year on year.
“In the coronavirus pandemic, there is a paradoxical phenomenon where real estate prices are accelerating their growth. This makes owner-occupied housing less and less accessible to people on average incomes. On the other hand, demand is growing, which is caused by cheap housing loans and growing household savings, “BH Securities analyst Štěpán Křeček.
In the last quarter of last year, apartment prices rose in all EU countries. They increased the most in Luxembourg, by 16.7 percent. This was followed by Denmark (by 9.8 percent) and Lithuania (by 9.4 percent). Prices rose the least in Ireland (by 0.6 percent), Italy (by 1.6 percent), Spain and Malta (by 1.7 percent).
“Flats in the Czech Republic have risen in price by almost half over the last five years, mainly due to persistently strong demand, which is far from being kept up by supply. While interest in flats and family houses remains consistently high, they are becoming less and less. It doesn’t matter if the demand is driven by interest in one ‘s own housing or speculation. In fact, it is a quarter less than before 2009, and that is definitely something to say, “added ČSOB analyst Petr Dufek.
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.
According to Trinity Bank analyst Lukáš Kovanda, the pressure for a significant rise in real estate prices in the Czech Republic will continue in the near future. “Overall, construction output will lose about six percent this year. It will not return to growth until 2022. The construction industry is suffering from a shortage of suitable labor, for example from Ukraine, and pandemic uncertainty. These factors are reflected, for example, in , “Kovanda added. According to him, the slowdown in construction activity in housing construction will be reflected in a further reduction in the supply of new housing on the market, which will lead to increased pressure on rising real estate prices and, consequently, rents.
Source: CTK
