The offer prices of flats in the Czech Republic are falling, down by about five percent since the beginning of the year. According to a survey by the internet portal Valuo.cz, which analyses data from the land registry and public offers, as well as data from the Century 21 real estate network, apartments are piling up on real estate servers and brokers are having to work harder to find buyers. Even so, according to the data, an apartment in Prague sold for CZK 85 million this year.
Data from public offers of apartments for sale, according to Valuo.cz, show that offer prices in 15 major cities were 4.7 percent lower in October than in the second quarter of the year. Based on its data, Century 21 said that since the beginning of this year, offer prices have fallen by about five percent, but added that real prices of properties sold have fallen by up to 30 percent.
“This is quite logically an expected development. Following the rise in interest rates, the number of mortgages granted has fallen, thus reducing buying power. Sellers who do not react to this situation and do not lower their prices do not sell and their properties hang on real estate servers for months,” said Radek Šitera, founder of Valuo.cz.
Lukáš Peterek, a broker at Century 21, said that after the 2008 crisis it took eight years for prices to get back to their original level and start growing again. “It is impossible to predict the length of the price drop, but we can say with almost certainty that it will not be just like that and certainly not next year,” Peterek said. He said that a 3+1 panel apartment in Brno – Staré Lískovec, which was to be completely reconstructed at the end of last year, cost around CZK 6 million and has now been sold for CZK 5 million, 16.7 percent cheaper.
The Valuo.cz portal said in an analysis that 22 percent of the flats advertised in October 2022 were discounted. A year earlier, it was 12 percent. The average discount is CZK 269,269, according to the data.
Year-on-year, Valuo.cz said, the number of sales dropped by 26 percent nationwide, and by as much as 64 percent in Liberec. As the number of sales falls, offers are piling up on real estate servers. Since October 2021, the number of apartments on offer in the Czech Republic has risen by 99 percent. In Jihlava, the year-on-year difference is as high as 243 percent, the survey says.
Sellers thus have to rethink their strategy to find a serious buyer. Miroslav Střihavka of Century 21 said that if a broker wants to sell today, he must anticipate the price development and know the situation. “The present is testing the quality of brokers. It is not enough to publish an advertisement. A broker has to work out the marketing and invest in it. Presentation, virtual tours, professional photos and videos or work with social networks are important. Such marketing is quite expensive and the broker should consider well what he wants to sell at all. Either he has a chance to sell or he throws money down the drain,” said Střihavka.
According to the survey, the most expensive apartment sold this year in Prague’s Josefov district sold for CZK 85 million. In Karlovy Vary near the colonnade, the price of an apartment climbed to CZK 22.6 million and the third is an apartment in Brno, where it sold for CZK 18.2 million.
Source: Valuo.cz and CTK
