A recent survey by Ipsos agency reveals that more than 60% of Czechs anticipate a rise in property prices by three to five percent this year, both for rentals and new home sales. However, over half of the property owners surveyed also expressed concern about decreased property value due to inflation.
“People have a realistic overview of current mortgage interest rates. On average, they estimate the interest rate for a three-year and five-year fixed mortgage between 5.5 percent to seven percent,” said Martin Novak, an analyst at Broker Consulting. While apartment sale prices stagnate after a summer surge, rentals continue to rise. This trend is similar in both significant real estate markets, Prague and Brno.
Two-fifths of people have or are saving their resources or reserves for a planned purchase or renovation of a property. A third anticipate taking a mortgage to cover these expenses. Over three-quarters of respondents believe that high prices across real estate are due to high-interest rates. Currently, more than a third of those surveyed have a mortgage.
Compared to the beginning of this year, people are more optimistic about the development of housing prices, primarily for rentals. Fifty-four percent of respondents, however, responded that they are still very high.
“A part of the population perceives economic reality through the rear-view mirror. For example, a few years ago, when mortgage rates were record low, people arranged short fixes with the prospect that rates would be even lower. At that moment, however, it made the most sense to arrange the longest fixation possible,” added Novak.