Czech Republic: Developer trio assesses real estate market development: more new apartments, lower prices, and interest rates hovering at the historic minimum
The talk event, which took place on a Wednesday forenoon, confirmed certain trends that had already been observed earlier, but also brought new facts to light which had not been previously presented in public.
Among the long-term factors which have positive impact on the purchase and sale of new apartments across the country, the low mortgage interest rates (1.6%) surely play a chief role, and so does the preparedness of the general public to take the risk associated with an investment into real estate. The average price per sold square meter of apartment space has gone down from CZK 56,178 to CZK 55,555 (incl. VAT), though this may also be due to a number of low-cost projects offered by developers, especially in Prague. Not taking into account the extreme end of the budget market, the current price per square meter in the capital city oscillates between CZK 60,000 – 62,000 (incl. VAT) – a quarterly decrease by 2.3 %. According to the published statistics, around 1 700 apartments were sold in Prague in 2Q, and 1 250 in the rest of the country. All told, people across the Czech Republic have acquired about 6 400 new apartments into private ownership since the beginning of the year. It should be noted that the growing demand of foreigners in residential properties has been a significant contributing factor to the growth in sales. Well-to-do clients from Russia or Asia, in particular, are interested in new apartments.
About half of all new apartments are sold by the Big Five among developers – Ekospol, Central Group, Skanska, Trigema, and Finep. Most in demand are one-bedroom apartments with kitchenette with an average floor size of 550 square feet, priced at up to three million crowns.
The developers’ current portfolio comprises offerings of about seven thousand apartments.