The price of real estate in the Czech Republic during this period was constantly growing, but not so fast and fast. According to experts, this was the most appropriate time for profitable sale.
It was in 2018 that the Czech real estate market began to change. Prior to that, prices had been rising by 10%-15% per year, but for solvent buyers it was not significant. The price spike was replaced by a period of temporary stagnation, after which the growth resumed, but at a calmer pace.
Statistics show that the biggest price increase was observed in Prague. It should be noted that in other cities and regions of the Republic things were a little different. In this situation, many Prague residents could only afford an apartment in a prefabricated building.
What do the numbers say?
The situation on the real estate market at that time is most clearly illustrated by the figures:
- In Q3 2018, the number of mortgage loans was 10.3% lower than in the same period in 2017.
- The amount of money mortgaged by citizens decreased by 8.6 billion kroons.
- According to cadastral statistics, sales fell by 7%.
- At the same time, in the autumn of 2017, 5600 apartments were sold on the Gealithu website, and at the beginning of 2018 the figure reached 6100 apartments.
- In the summer of 2017 new buildings in Prague offered 4,259 apartments, and exactly one year later this figure reached 5,411 apartments.
There was no reduction in real estate prices in 2018 – 1Q2019. They depend on the processes taking place in the country’s economy and its condition. During the period of economic growth and low unemployment, when people had high salaries, they were ready to buy and even overpay, bringing high incomes to companies. However, the situation changed a little bit and if the object was really worthy, it was sold for an order of magnitude longer because of the high price. The tendency is that having the desire to sell real estate quickly, the price for it had to be set quite low. If the price was high, it had to wait a long time.
If the sale was not urgent and, in principle, the owner could not yet use the property for personal use for more than one year, then sell it made no sense. And in a situation where there was a specific purpose, and the owner knew where to spend the proceeds, sold without hesitation. According to experts, this was the best time, as the price was on top. After all, in the event of its fall, when there will be the next such peak, no one could predict.
Experts in the field of real estate warned against buying an apartment with the purpose of reselling it in a few years, as the biggest price boom passed, and there was a high probability that in a couple of years its sale would be unprofitable to the owner.
A good contribution was considered to be the purchase of the property for subsequent renting out. This is a good investment, which will be profitable for many years to come.
Outflow of Russian-speaking investors
Due to the difficult situation in the homeland, Russian-speaking investors began to leave the country in large numbers during this period. As a result, the flow of investments from their side has decreased, and it has become more difficult to export money. If earlier 40% of new buildings were bought from Russian investors, now this percentage has fallen by more than 2 times.
Tougher conditions for mortgages
Tightening conditions for taking a mortgage loan and high prices led to a significant decrease in the purchasing power of citizens.
The outflow of investors from the CIS countries, changes in the rules for taking out mortgages, and imbalances between supply and demand all lead to a constant rise in the price of Czech real estate.