Compared to the same period in 2021, this represents an increase of almost a quarter, but the number of new apartments for sale in the metropolis is still around 15 percent below the long-term average and more than 50 percent below the level that could sufficiently saturate demand.
This resulted from an analysis of the residential market, prepared by the companies Trigema, Skanska Reality and Central Group.
The transformation of the surroundings of Radlická continues. Hundreds of apartments, offices and schools will be built here
“Furthermore, the real scenario is that the crisis will also have a strong impact on some smaller developers, who will be forced to completely stop the construction of apartments. And this will lead to a further decrease in supply,” Marcel Soural, chairman of the board of the investment group Trigema, described the situation.
The structure of buyers is changing
In total, 950 new apartments were sold in the metropolitan area in the second quarter. Compared to the same period last year, this represents a decrease of 64 percent. According to experts, the lack of availability of mortgages, caused by a sharp increase in the basic interest rate, has a fundamental effect on the decline in sales. At the beginning of August, it amounted to 6.28 percent pa
The Hypomonitor of the Czech Banking Association, which captures data from all domestic banks and building societies providing mortgage loans, recorded a significant year-on-year decrease in the volume of mortgages granted in June this year – by 65 percent.
“The current situation on the mortgage market has practically overturned the structure of buyers. While in the past there was a preponderance of clients who financed new housing with a mortgage, today this ratio has turned in favor of investment purchases. Interest in new housing in Prague and its surroundings persists, however, some clients, especially among people under thirty years of age, cannot afford a mortgage under the current conditions,” said Petr Michálek, CEO of Skanska Reality.
Other developers operating in and around Prague speak similarly. “People purchasing housing with a mortgage have essentially disappeared, and real estate is now being bought mainly by those who have free money that they don’t want to let lie idle in times of high inflation,” confirmed the trend by René Skála, CEO of SIG Development.
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According to Roman Weiser, director of development and construction at Bidli, the share of buyers’ own resources has increased and the loaned part of the purchase price has decreased. According to him, more and more people even buy them, when the client pays for everything from his own resources. “However, the demand for real estate is slowly returning to normal, i.e. until the period before 2020. The last two years were above average commercially, while the year 2021 reached a historical maximum in terms of the volume of loans and the number of properties sold,” said Weiser, adding that in terms of the amount of sales, he expects them to reach similar numbers to 2019. “As the statistics tell us, the number of people interested in real estate has doubled in August compared to July, which is due to the large number of vacationers in the first half of the holiday season. That’s why I see future developments as a continuation of the normal state from before covid.”
Where will the prizes go?
In the second quarter of this year, there was a certain stabilization of the prices of new apartments on the Prague residential market, when the average selling price per square meter “settled” at 145,783 crowns, i.e. an amount comparable to the first quarter. “In a year-on-year comparison, the prices of new apartments in the metropolis increased by roughly a fifth. But recently they have stabilized. For the entire year 2022, we expect growth of up to ten percent at the most,” Dušan Kunovský, head of Central Group, pointed out.
According to Roman Weiser, real estate prices will continue to rise, albeit more slowly, or their level will stagnate in some locations for some time. “Due to the high prices of real estate in Prague, the trend of buyers moving to the surroundings of the metropolis also continues. And that of both the people of Prague and those who were originally looking for real estate in the capital,” added Weiser.
People are more interested in living in Central Bohemia. Prague is getting more and more expensive
“Due to its economic strength, Prague is an attractive place to live, but little is built on its territory, which means that only a limited number of people can stay there. In addition, the current transaction prices of apartments in Prague are not acceptable for many buyers, so they are looking around the Central Bohemian region,” Petr Hána from Deloitte company described some time ago to Deník.
According to the latest data from the Czech Statistical Office, the Central Bohemian Region, not Prague, is now more populated. The districts Prague-východ and Prague-západ, which contribute more than two-fifths of the overall increase in Central Bohemia, are being sought. About five thousand more people moved to the Central Bohemian ring from Prague alone last year than the traditional average – it has been around twenty thousand in recent years.