The average price of flats in the Czech Republic fell slightly in the second quarter for the first time since the winter of 2019. At the beginning of the summer, apartments were selling for CZK 88,756 per square meter nationwide, two percent cheaper than in the spring. However, rent prices are rising.
This is according to the Quarterly Real Estate Market Monitor of the real estate group EHS, which uses data from real estate services Bezrealitka and Maxima Reality.
“The long-awaited earthquake is coming to the Czech real estate market. The prices of several properties are starting to fall after many years, the supply is radically changing, with new properties sold under the pressure of circumstances,” said the report’s authors.
In Prague, the average price of an apartment fell by three percent to CZK 118,263 per square meter and in the Central Bohemian Region by six percent to CZK 72,578 per square meter. Prices continued to rise in South Moravia.
Not everywhere. However, there was a price decrease. For an apartment in Brno and its surroundings, buyers paid an average of CZK 95 215 per square meter, three percent more than in the previous quarter. By the way, this was the price at which a Prague apartment sold at the end of 2020.
On the other hand, average prices of flats fell the most in the Zlín Region (by 21 percent to CZK 44,828 per square meter), in the Vysočina Region (by 18 percent to CZK 48,072 per square meter) or in the Ústí nad Labem Region (by 14 percent to CZK 32,528 per square meter).
Hunger for rents
In contrast, a large number of people are looking to rent, and so prices are rising. Firstly, due to the refugee wave from Ukraine and high property prices and expensive mortgages after the Czech National Bank raised the base interest rate to seven percent.
“The record number of households heading into rentals has created unexpected rental peaks,” the report’s authors said. Average rents across the country jumped six percent.
In Prague, rents rose above the CZK 300 mark for the first time – the average apartment was offered for CZK 304 per meter at the beginning of the summer. Flats in the Central Bohemian Region also reached a new high of CZK 226 per square meter of rented space.
Rents in Brno and its surroundings rose by four percent to CZK 258 per square meter of rented area. However, rents rose even more in Zlín (by 17 percent to CZK 204 per square meter of rented space) and in Pardubice (by 14 percent to CZK 211,204 per square meter of rented area) or in Vysočina (by 10 percent to CZK 194 per square meter of leased space).
Houses, on the other hand, became ten percent more expensive
Although the real estate market is cooling as expected, unlike apartments, the average prices of family houses rose in the second quarter by a full tenth to CZK 52 264 per square meter. This was partly due to more homes under construction in good locations.
However, according to EHS chief Hendrik Meyer, prices cannot be expected to fall evenly across the market. Instead, average prices are being dragged down by declines in specific property types that have been overvalued in recent months.
“The best quality properties, such as mid-sized apartments in city centers with good transport links, will continue to rise,” Meyer believes.