As shown by the latest data from the residential market of the companies Trigema, Central Group and Skanska, the expected drop in the prices of new apartments in Prague did not occur and, according to the developers, most likely will not occur. But the developers will certainly not announce to the world that they expect a drop in the prices of new apartments. After all, this is what they deliver on the market. If they announced that prices would fall, they would be against themselves, says Trinity Bank Chief Economist Lukáš Kovanda.
The truth is that the market is now waiting. The discounting of apartments in older buildings is “stacked”, this especially applies to panel apartments. New buildings are of course more attractive, if only for reasons of sustainability and lower energy consumption, however, this does not mean that their price must be completely immune to decline.
Mortgages will get cheaper, but perhaps not enough
According to the developers, the revival of sales will be brought about by cheaper mortgages. Of course. Cheaper mortgages will improve the availability of real estate financing. But due to the development of inflation, it may not be cheapened quickly.
The volume of mortgage loans fell by two fifths by September
Money
Construction savings banks provided loans for around 49 billion crowns from January to September this year. In a year-on-year comparison, this means a decrease of 41.5 percent. At the same time, savings banks concluded 389,581 new construction savings contracts in three quarters, which is 11.6 percent more than in the same period last year. This follows from the data of all five domestic savings banks.
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Moreover, due to the high cost of energy and the impending rise in the unemployment rate, the decline in mortgage prices must be really drastic to revive the demand for real estate. It is possible that before such a recovery in demand occurs, developers and other sellers of new buildings will run out of patience and will make them cheaper too.
There were 4,700 new apartments available in Prague at the end of the third quarter. This is 13.3 percent more than the second quarter of this year and 70.9 percent more than the third quarter of 2021, when supply was at an all-time low. However, according to the developers, a decrease in supply is more likely in the next period.
Dalibor Martínek: Times have definitely changed. Don’t look for a new apartment with a developer
Opinions
Today’s billionaires, who built their business on the construction of apartments thirty years ago, are starting to tread water. Korec, Kunovský, Sekyra et al. Experienced entrepreneurs who were able to find a way to earn billions of crowns by acquiring land, built houses on it and sold the apartments profitably.
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The market for new constructions simply froze. Buyers are waiting. If they feel that it is worthwhile to wait even two or three years before even new buildings become cheaper, they will wait. This will depend on the development of the overall energy and economic situation.
Anyone who is now thinking about buying a property, even a new building, simply won’t make a mistake if they wait two or three years. Real estate can be cheaper during that time. And mortgages will certainly be cheaper.
The cheapest way to buy an apartment is in Ústí nad Labem. Even there, the price went up by almost 15 percent from year to year
Reality
Older apartments in the Czech Republic fell in price by one percent in the third quarter of this year, but they are more expensive year-on-year. In Prague in the summer, they were sold for around 125,000 crowns per square meter, while in the second quarter they were two percent more expensive, but seven percent more expensive than last year. This results from the analysis of the company FérMakléři.cz, which cooperates with more than a hundred real estate brokers.
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