More than 7,000 mortgage loans were signed by Czech banks in June, the most since November. That’s being seen as a sign that after demand for residential real estate dried up during the lockdown period, underlying demand is once again dictating the market’s development. In part, of course, the freeze in sales was brought about by technical issues. Potential buyers were prevented from visiting homes by the lockdown and by the simple fear of walking into unknown buildings together with strangers. But the government let it slip that it planned to abolish the real estate tax (4 percent, paid by buyers), meaning that rushing through any deal could be costly. Once the lower house of parliament approved the end of the tax, flat sales began to pick up again (even though the Senate and president still have to approve it). However, hopes that real estate prices would fall in the aftermath of the pandemic haven’t panned out yet. In fact, says the chief economist of HB Securities Stepan Krecek. “That’s being reflected in the average level of mortgages, which has already reached CZK 2.7 million,” he said. Krecek added that the loosening of restrictions on mortgage loans has also helped the mortgage market by opening it up to more potential customers.
