The recovery of the real estate market is finally a positive reality. According to the real estate portal Sreality.cz, demand for new housing units in Prague and other Czech cities is steadily increasing. According to Sreality.cz data, the biggest investment attractiveness are flats in sizes from 20 to 39 sqm, which are rented out faster and return the investment. These smaller units have the best return on investment in Prague.
There is an increased demand for real estate in Prague, not only among investors but also among end customers looking for their housing. Developers such as JRD have seen a significant increase in sales in the first quarter of 2024. Interest in new apartments in Prague has increased by 80% compared to the end of 2023. This trend is also seen in other Czech cities, such as Brno, where sales of new apartments have doubled.
Property prices and trends
The prices of new apartments in Prague have remained almost unchanged, but at the same time, rising demand is causing developers to have less room to provide marketing bonuses and discounts. This may lead to a slight increase in prices by units of percent on average. In the first quarter of 2024, the average offer price of new apartments in Prague was CZK 152,644 per square meter.
According to the real estate portal Sreality.cz, Prague is the most expensive location for buying real estate, with the highest purchase prices in the entire Czech Republic. However, investors still see Prague as an attractive location for investment.
Mortgage situation and market impact
Stabilizing inflation and the expected reduction in mortgage interest rates are contributing to the market recovery. According to the CBA Hypomonitor, the new mortgage rate fell to 5.19% per annum in March 2024, indicating a downward trend. This situation affects not only the volume of property sales but also prices.
Trends in rental housing
Rents in Prague and other Czech cities are showing a slight increase. Smaller apartments are renting fastest, especially in city centers. For example, the average rent in a 60 to 79 sqm apartment in Prague is CZK 23,214 per month. Larger flats with an area of over 120 sqm have a longer advertising period and higher rents.
Market expectations
It is evident from the past development of property prices that prices will not fall, although we are not seeing the acceleration that we have seen in the past. The gradual stabilization of inflation and the expected fall in interest rates may lead to further moderate house price growth.
Overall, the recovery trend in the property market is a positive sign. Investors and end customers are showing an increased interest in new apartments and properties, which contributes to the growth and stabilization of the market in the Czech Republic.
Source:
Hospodářské noviny
https://www.newstream.cz/reality/byt-na-investici-nejvic-se-vyplaci-koupe-tech-nejmensich-v-centru-prahy
https://zpravy.kurzy.cz/764189-oziveni-na-trhu-nemovitosti-je-konecne-pozitivni-realitou-jrd-hlasi-100-narust-prodeju/
