The real estate carousel is spinning. Real estate prices will rise significantly this year, says the broker

You can also listen to the interview in the audio version.

The real estate market has been dominated by expensive financing for two years. High interest rates combined with the rules of the Czech National Bank for obtaining a home loan forced a large number of buyers to consider the investment more and calculate whether it will really pay off.

Overall, the market in terms of demand fell by tens of percent compared to the record year 2021.

According to František Kroupa, real estate broker from Archer Reality, this year will be marked by rapid growth, and not only from the buyer’s point of view.

“The real estate market is expecting a significant increase from the point of view of demand, but also from the point of view of sellers. In the last two years, fewer contracts have been implemented in general. You could see that the sellers were also waiting for a more favorable period,” says František Kroupa in Agenda SZ Byznys. It was the shrinking of the entire market that greatly contributed to the fact that the price of housing fell very little on average during this period.

Although, according to his experience, the growing interest in concluding new transactions can already be felt, investors are still waiting.

“At the moment when mortgage interest rates fall below four percent, I am convinced that the right carousel will begin and the market will start up again,” says the real estate broker in an interview with SZ Byznys.

Real estate, whether apartments or family houses, will start to become more expensive again.

“When you’re hungry, you have to eat once. And now the market is starving. We see that people want to buy and are looking for new housing. It is clear that housing will become more expensive again. I think that real estate can become more expensive by 12 to 15 percent this year alone,” said Kroupa.

In practice, an increase in the average price of a 50 square meter apartment in Prague would mean a difference of almost a million crowns. Even at the end of last year, such an apartment would have cost around six million crowns. With a 15 percent increase in price, the price would increase to 6.9 million crowns.

According to him, specific developments will significantly affect the actions of the Czech National Bank and also the competitiveness of domestic banks. “The decisive factor will be how the banks will react to each other and how quickly the client will get a favorable mortgage,” adds the real estate expert in the Agenda program.

According to František Kroupa, the expected increase in real estate prices is the reason why it is more profitable to invest in housing even before interest rates are lowered below the mentioned four percent.

“If, under the current conditions, the buyer takes out a mortgage loan with a three-year fixed term, he will pay more in interest, but at the same time he can save on a bargain purchase at the moment, significantly more than he would save on a cheaper mortgage. The difference can be tens of percent,” says the expert.

According to him, real estate prices are expected to rise across the whole of the Czech Republic, but the capital city and localities where there is enough work must prepare for the most significant growth.

“An example can be Humpolec, where new businesses are being established and prices there have started to rise rapidly. I think that the north of the Czech Republic is also becoming very interesting for investment. Also in cities such as Ústí nad Labem or Chomutov, housing prices will gradually start to rise,” the real estate broker describes the expectations.

The only exceptions that will avoid widespread price increases will be properties that have a problem.

“Many clients these days monitor whether properties have a satisfactory energy efficiency. High consumption can be an example of a problem that will reduce the attractiveness of the property,” says František Kroupa.

“An important issue is also the certain future of the location, urban planning. A large number of clients are now dealing with future infrastructure and are waiting, for example, for the construction of an expressway or a new road. At the same time, this should be an impulse for real estate agents, what to be more interested in when selling real estate,” he adds.

You can listen to the entire interview in the introductory video.

Agenda