The cancellation of the real estate tax should offset any downwards pressure on Czech residential prices brought about by the coronavirus crisis. That was one of the main findings of a discussion organized by the Czech bank ČSOB. At the same time, the stubborn growth of prices is the only thing that might end up slowing down the market in terms of sales. “The demand is there, but there’s nothing to buy,” said the bank’s analyst Petr Dufek. “Sellers are in a holding phase and they’re not rushing to bring their properties to market.” Construction savings banks have handed out CZK 25.6bn in loans over the first five months of 2020, which is one-third more year-on-year. Overall, however, such loans are expected to fall by up to 15 percent this year. By contrast, perhaps spurred on by low rates, mortgage loans are showing signs of life, as banks handed out CZK 17.85bn during the month of April. That’s the highest volume of mortgages ever for the month of April. This bodes well for overall sales numbers. “The cancellation of teh real estate tax will definitely spark demand,” said Hypoteční banka’s board chairman Jiří Feix. “There’s now an 18 month period during which buying real estate with a mortgage will be interesting, which could serve to reduce prices. But we don’t expect a dramatic change in prices because the forces in both directions are balanced.”
