A recent survey by the Czech Banking Association (CBA) and Ipsos has shown that one in five Czech citizens plans to take out a mortgage in the next few years. This represents an increase of one-third compared to last year. The survey also found that more Czechs are now closely monitoring interest rates and monthly repayments than ever before.
In the past, during low-interest rates, people often relied on recommendations from their bank advisors or family members. However, the survey suggests that people are now much more aware of the importance of interest rates and the impact of mortgage repayments on their household budgets.
According to the survey, two-thirds of Czech citizens own their own home, with a third having purchased their property using a mortgage and a quarter using their savings. However, half of those who had planned to take out a mortgage have had to reconsider due to rising living costs. The other reasons for delaying their plans include waiting for more favorable property prices or better mortgage conditions.
The CBA Hypomonitor has shown that the mortgage market is starting to recover after a period of decline. While the number of mortgages being taken out had fallen to its lowest level in two decades, the situation has improved in recent months, with March 2023 showing an increase in mortgage activity.
According to Jakub Seidler, the chief economist of CBA, “The mortgage market has been in a significant decline since the middle of last year, and the number of mortgages being taken out has fallen to its lowest level in the past two decades.
Half of the households planning to take out a mortgage have delayed their decision mainly due to rising living costs or waiting for more favorable property prices and interest rates. Although the March figures for the mortgage market are better, the volume of mortgages provided in March 2023 remains the lowest since 2014.”
The survey also found that people rely less on bank advisors and family members when making mortgage decisions. Instead, they are more likely to be influenced by interest rates (46%) and the annual percentage rate of charge (33%), which is an indicator of the total cost of the loan, including fees. The importance of these factors is understandable, as rising living costs and higher interest rates can significantly impact household budgets. Consequently, Czech citizens seek lower monthly repayments and more favorable mortgage conditions.