Prices for older flats in larger Czech cities have risen by nearly five percent year-on-year in the second quarter of 2024, with the average cost now reaching CZK 60,737 per square meter for a renovated unit. This trend is consistent across all cities surveyed, with none experiencing a year-on-year or quarter-on-quarter decline.
The most significant year-on-year increase was observed in Ostrava, where prices surged by 16 percent. Pilsen and Brno also saw substantial hikes, with prices rising by more than 10 percent. On a quarter-on-quarter basis, Ústí nad Labem experienced the highest price increase, at six percent. This data comes from an analysis by the real estate portal FérMakléři.cz.
The analysis noted that prices in the last three months have accelerated faster than the average annual growth rate. In Ústí nad Labem, prices rose by CZK 1,500 per square meter year-on-year. This is a notable shift, as the previous quarter saw Ústí nad Labem being the only monitored city with a slight year-on-year price decline. The recent quarter-on-quarter increase in Ústí was more pronounced than in any other city. Prices also climbed by nearly five percent in Olomouc and České Budějovice during the same period.
According to Jan Kunz, a market analyst, the rising interest in flats and the resulting price pressure can be attributed to the gradual decrease in interest rates, despite mortgage rates falling more slowly than the Czech National Bank (CNB) has been cutting rates. Data from the Czech Banking Association’s Hypomonitor shows that Czech banks and building societies issued mortgage loans worth CZK 24.2 billion in June, the highest amount since March 2022. This represents a two percent increase from May and a significant 73 percent rise year-on-year. The interest rate on new loans dipped slightly to 5.06 percent in June, down from 5.07 percent in May. Additionally, the CNB’s Bank Board lowered the base rate by half a percentage point to 4.75 percent at the end of June.
Source: FérMakléři.cz and CTK
