The appetite for homeownership remained strong at the start of the year, as confirmed by both developers and real estate agencies, along with banking statistics on mortgage lending. According to the Czech Banking Association’s (CBA) Hypomonitor, the volume of new mortgages was approximately three-quarters higher than the previous year, despite interest rates declining at a sluggish pace.
Banks and building societies issued mortgages worth 22.6 billion crowns in November, with 18.7 billion representing newly concluded contracts. While this marks a 5% decrease from December due to typical seasonal patterns, the year-over-year volume surged by 72%.
Martin Vašek, CEO of ČSOB Mortgage Bank, notes that applicants are responding to rising property prices. “Clients are accelerating their housing decisions because delaying purchases could prove more expensive in the coming months. That’s why mortgage interest remained strong even in traditionally slower January, with decent sales volumes,”.
The average mortgage rate for newly concluded housing loans saw only a marginal decrease from December’s 4.8% to November’s 4.78%. For an average mortgage of 3.92 million crowns over 30 years, the monthly payment last month was 20,541 crowns. While this represents only a modest decrease of tens of crowns compared to December, year-over-year savings amount to nearly 1,900 crowns monthly.
The average mortgage has increased by approximately half a million crowns over the past year, representing a roughly fifteen percent increase. Despite lower interest rates, buyers are ultimately paying more due to rising property prices, as they need to borrow larger amounts.