Despite the outbreak of the deadly 1918 flu pandemic, the Czech Republic's housing market remains buoyant.
Even in the midst of an economic recession caused by the coronavirus, Czech house prices are still rising sharply. Inflation-adjusted increases of 7.75 percent in Q2, 8.6 percent in Q1, 8.93 percent in Q4, and 8.72 percent in Q3 were reported during the year to Q3 2020, following year-on-year increases of 7.75 percent in Q2, 8.6 percent in Q1, 8.93 percent in Q4, and 8.72 percent in Q3 reported in Q2, Q1, Q4, and Q3 of the previous year, respectively (CNB). qatar property
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.
The annual house price change graph for the Czech Republic
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.
According to Deloitte, the average selling price of flats in regional capitals, including Prague, increased by 15.8% in Q3 2020, to CZK 70,300 (US$3,171) per square meter (sq. m.).
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. About a fifth of the total property sales in the country happen in Prague.
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.
Because the Czech economy is improving, the housing market is expected to remain buoyant in 2017.
In contrast to the previous 3.5% average growth, Czech GDP shrunk by 5.6% in 2020. The IMF anticipates the U.S. economy will grow by 5.1% this year, though in the wake of the imposition of another financial regulatory measures, the European Commission's forecast of 3.2% growth by 2021 might be more realistic.
house prices vary depending on the location
Prague 1 and Prague 2 had the most expensive apartments within the capital city, with an average price of CZK 148,100 (US$6,681) per sq. m. In contrast, in the capital, the cheapest housing could be found in Prague 4, where the average price per square meter was CZK 85,000 (US$3,834). Conversely, in Prague 9, the average price per square meter was CZK 86,600 (US$3,906).
Q3 2020, Deloitte reported flats selling for an average price of CZK 71,500 (US$ 3,225) per sq. m. in Brno, the second largest city in the Czech Republic. Prices for apartments in the Central Bohemian region have increased by CZK 59,100 (US$2,666) per square meter, while those in Olomouc have decreased by CZK 48,100 (US$2,170) per square meter.
the price indices for the Czech Republic
Also referred to as the 'Northern Bohemian region,' the municipality of Ústí nad Labem has the least expensive housing in the country, with prices at an average of CZK 22,800 (US$1,028) per sq. m. in Q3 2020. Karlovy Vary, near the German border, is the second most inexpensive, charging CZK 27,600 (US$1,245) per sq. m. on average. Also referred to as the 'Northern Bohemian region,' the municipality of Ústí nad Labem has the least expensive housing in the country, with prices at an average of CZK 22,800 (US$1,028) per sq. m. in Q3 2020. Karlovy Vary, near
a short history of the housing market
the boom from 1998 to 2003 Public spending went up 64% as a result of the EU entry of the Czech Republic in 2004, and as a result, the house price index rose. Consequently, the Czech Republic never joined the Eurozone, which has impacted negatively on the country's economy.
In this period, apartment block prices increased by 118%, followed by individual apartments, which saw an increase of 91%. House prices increased by 58%, while plot prices only rose by 31%.
Stagnation occurred between 2004 and 2005. During the EU transition period, EU citizens were only allowed to buy property. Budget-cutting measures probably were the primary cause of the housing market's stagnation during this time period.
short surge from 2006 to 2008 The house price index shot up by over 31 percent (27.1 percent real) in 2007 due to anticipation of a five-percentage-point VAT increase to 19 percent.
Bearing the brunt of the financial crisis, 2009-2013. As of the end of 2008, apartment prices rose 10.5% year-on-year (up 10.5% in real terms), and in 2009 prices declined by 13.3% (-13.3% in real terms) due to the global financial crisis. In addition, the following years saw an overall drop in the demand for new houses as well as in residential construction, causing a 14% (real) decrease in home prices in 2010-13.
2014-2019 housing market recovery In 2014 and 2015, the house price index rose by 12% (12% in real terms). During this time, the economy improved.
House prices increased 7% in real terms each year from 2016 to 2019.
The demand is strong.
Demand was quite strong throughout 2016 even in the face of the pandemic. Popular
According to Deloitte, around 2,600 sales were recorded in 2020, down by 2.7 percent from the year before. Despite increasing the number of sales from CZK 14.3 billion (US$645 million) to CZK 17.2 billion (US$790 million), the actual increase in sales volume was 21.2 percent.
Over the past year, the sales of brick houses rose by 5% to CZK 1.611 billion (US$320 million) and transaction volume jumped 22.4% to CZK 7.1 billion (US$320 million).
Despite an overall increase in transaction volume, sales of apartment buildings fell by 0.3 percent year-on-year to 2,073 units while transaction volume rose 18.5 percent year-on-year.
Sometime in Prague:
Transactional volumes went up 28% from last year to approximately CZK 9.6 billion (US$433 million).
Residential sales in brick houses rose 2.7% from the previous year to 650 units, and transaction volume increased by 20% from the previous year to CZK 4.2 billion (US$189.5 million).
Apartment buildings saw an 11.2% increase in sales, from 656 units in 2020 to a total of CZK 2.9 billion (US$131 million) by the end of the period.