Even in the midst of an economic recession caused by the coronavirus, Czech house prices are still rising sharply. In the third quarter of 2019, prices increased by 8.37% year-on-year, after increasing by 7.75% in the second quarter, 8.6% in the first quarter, 8.93% in the fourth quarter of 2019, and 8.72% in the third quarter of 2019, according to the Czech National Bank (CNB). real estate qatar
During the third quarter of 2020:
The price of new dwellings rose by nearly 10% (adjusted for inflation) and is now 6.5% above their previous peak in Q3 2008.
An increase of 4.66 percent (inflation-adjusted) year-over-year or 49.3 percent above the previous Q3 2008 peak in the average price of existing dwellings drove up the average cost of new houses 8.12 percent.
Overall, prices for land rose by 10.11% (6.58% inflation-adjusted) over the course of the year to Q3 2020.
Residential construction fell last year, helping to boost home prices as demand remained robust due to low mortgage rates.
Mortgage rates fell below 2% in 2020, resulting in extremely cheap loans being used to encourage clients to invest in the residential sector.
Flat sales prices in regional capital cities such as Prague in the Czech Republic saw a 15.8% increase from Q3 of 2018 to Q3 of 2020, and they averaged CZK 70,300 (US$3,171) per square meter (sq. m.), according to Deloitte.
The price of apartments in Prague has increased by 10.4% y-o-y, going up to CZK 94,300 (US$4,254) per square meter. Prague accounts for almost half of the total property sales in the country.
A 10% increase each year over the past five years in nationwide house prices is almost double the rise in wages. The study revealed that Czech citizens must pay 11.4 times their average annual salary to buy a 70-square-meter home, the highest in Europe.
Czech Statistical Office estimates that dwelling completions will fall by 5.4% in 2020 to 34,432 units, following a year-on-year rise of 7.6% in 2019, 18.5% in 2018, 4.6% in 2017, 8.9% in 2016, and 4.8% in 2015. (CZSO). Dwelling starts, which peaked in 2018 at approximately 37,800 units, will decline to 35,254 units in 2020.
There is strong expectation that the Czech housing market will continue to do well this year, as the economy picks up.
The annual house price change graph for the Czech Republic
In contrast to the previous 3.5% average growth, Czech GDP shrunk by 5.6% in 2020.
The European Commission's (EC) 2021 growth forecast of 3.2% may turn out to be more realistic than the IMF's estimate of 5.1% growth.
The net rental yield
slightly higher yields in Prague
According to data from the Czech National Bank, house and apartment prices in the Czech Republic have risen steadily since 2014. Prague is an expensive city in which to buy property, so if you're looking to invest in property, it's a good place to look.
What do you expect to earn? Depending on where you live, it is more or less important. For around 60 square meters in Prague 1, rental yields are low, coming in at around 3.2 percent. If you earn 5.3% in Prague, you will be wealthy.