Investments in residential real estate were less unfavourable in July than in June, according to data provided by UniCredit Bank. Its indicator, which represents the net annual rental yield minus the average of interest rates on mortgages and government bonds, rose to minus 3.08 percent. Investing in residential real estate continues to underperform, according to the indicator.
In July, the housing market stress indicator rose 19 points month-on-month to minus 3.08, making residential real estate investment slightly less unprofitable. This was due to a month-on-month drop of 18 points in the average yield on the 10-year government bond to 4.19 per cent, a six-point drop in mortgage rates to 6.24 per cent, a 0.5 per cent month-on-month fall in the price of the average home and a 0.8 per cent rise in rents, according to UniCredit Bank.
Of the regional cities, the least expensive properties continued to be in Ústí nad Labem and Ostrava, while at the other end of the ranking, Zlín took the lead, followed closely by Brno and Olomouc. The indicator rose month-on-month in ten regional cities, with Ostrava, Liberec and Hradec Králové rising the most by 49, 44 and 43 points respectively, due to strong rental growth and falling house prices.
Month-on-month, the indicator fell by 15 points in Zlín, 14 points in České Budějovice and five points in Jihlava. There were significant differences between the regional cities between 2013 and 2019. “These differences, however, began to quickly shrink during the real estate fever years to an unnaturally low level at the end of last year. This year we are already seeing a reopening of the scissors between individual cities, which is likely to continue in the coming years,” said UniCredit Bank analyst Jiří Pour.
Source: UniCredit Bank and CTK
Photo: RPMG for CIJ EUROPE
