Flat prices: dizzying upwards spiral
19. 7. 2016 | Source: BusinessInfo.cz
Prices for older (non-new build) apartments grew 8.4 percent year on year in the Czech Republic during the first quarter of this year, while flats outside Prague experienced a price leap of 9.3 percent.
The numbers, released by the Czech Statistical Office [ČSÚ], show prices strengthening far in excess of inflation. They are partly explained by the severe price decline that occurred during the recession. In all, prices have not yet crossed the average seen in 2010.
The spread ‘scissor blades’ demonstrating the apartment market differences between the capital and the rest of the country are also opened wide in the case of new build properties. The vast majority of new flats are being built within Prague.
It is mainly apartments in Brno that are costing far above the national average, according to the analysis of developer Trigema. Also expensive are flats in the northern Královéhradecký region. But this region’s figures are skewed by expensive apartments in Krkonoše [The Giant Mountains]. “The differences between the capital city and the regional cities are huge. Not one of the regional cities is at all approaching [Prague’s] overall volume of transactions,” said Miroslav Linhart, head of the real estate department at consultancy firm Deloitte.
That fact is one reason why the statisticians currently only monitor new build price development in the capital. The first-quarter figures show that the upward development seen in this segment is slacker than in the case of older dwellings. In the first three months, it reached a year on year tempo of 3.7 percent. “The demand for new build homes is being kept up by the record low mortgage interest rates and the anticipated positive development of the national economy,” said Evžen Korec, general director of developer Ekospol.
Originally published in E15 weekly, economic and business newsmagazine. Author: Daniel Novák