The Czech Republic is experiencing decreased residential construction, leading to rising home prices. According to experts, this decrease is caused by high inflation and bank loans, making it difficult for developers to finance new projects. High prices for construction materials and labor also play a role in the decreased construction.
The trend of decreased residential construction has been ongoing since last year, with investors slowing down their plans due to the deteriorating economy and high construction materials prices. This trend stabilizes the housing market and creates pressure for higher costs of older homes.
Experts predict that the decrease in construction will lead to a significant price increase for both new and old homes in the coming years. A study by foreign organizations ifo Institute and Institute for Swiss Economic Policy (IWP) found that the annual nominal growth rate of housing prices will be around nine percent and 15 percent in Eastern Europe.
As new homes become less accessible, the prices of older homes will rise. The market for older homes may diverge significantly, with homes in good locations and condition priced similarly to new homes, especially those in central parts of cities. However, homes in poorer areas or those needing significant reconstruction will continue to lose value.
The low supply of new homes has increased demand for existing homes, driving up prices. This situation is putting pressure on both developers and buyers. Developers are facing a decrease in demand for new homes, making it less profitable to build new residential properties. On the other hand, buyers are struggling to find affordable homes due to the high prices.
The situation is not likely to improve anytime soon, as the housing market is expected to face challenges in the coming years. Experts suggest that focusing on renovating existing homes may be the best solution for those looking to enter the housing market. Renovations can lead to more sustainable and energy-efficient homes, making them a more attractive investment in the long run.