The Czech Central Bank’s ability to slow the rise of residential prices turns out to be more limited than many expected. The bank intervened last year to make mortgage loans more difficult to secure, hoping in part to cool off an overheated market. But while this has slashed the number of mortgages banks are issuing, there are plenty of Czechs with sufficient cash to buy flats without a loan. The website CenovaMapa.org reports that in Prague, Brno, Olomouc and Pilsen half of all sales are now complete mortgage free. The site tracks residential prices via entries in the land registry of these cities and it also monitors which properties are listed as having been mortgaged. Hospodářské noviny writes that one-third of all flats sold by Central Group are financed by savings while the agency Re/Max puts the figure at 30 to 40 percent. HN says the Czech National Bank admits that its ability to control residential prices is constrained by high levels of liquidity among Czech consumers, but argues that its primary concern is to prevent over-indebtedness and risky behavior by banks.
