- Developer incentives have boosted sales of new buildings. After more than a year, a new project appears on the market.
- The correction of apartment prices has stopped. Offer prices are still attractive to the buyer.
- Slight regulation by the NB stands behind a fifth of new mortgages.
- The institutional landlord stabilizes the housing situation in Esk.
The Prask housing market has seen a gradual increase in sales volume over the last half year. This is caused by the cancellation of NB’s writing limits for providing mortgage loans, the offer of guaranteed mortgages by the developer and various project offers that were withdrawn from sale in the previous year and a half and were waiting for a suitable price to be re-offered to the market.
New buildings on offer
New development projects are appearing on the market again. Ron pauses due to the unstable situation
with energy, a sharp increase in construction costs and high inflation is over. Because the developer, who subsidizes the mortgage payments of his clients for a short period of time (in the unlikely case of two years), made the borrowers excited about the purchase. A substantial percentage of buyers still finance housing from their own resources.
The offer price of new buildings has not changed compared to the previous period. The price per square meter of a new apartment is 150,000 crowns. The input parameters of new buildings simply do not allow development companies to offer their products at lower prices. Clients who still want to buy, accept these conditions, explains Kateina Polkov, head of residential real estate at Knight Frank.
The price correction of old real estate is over
In the last year, on the secondary market, a small percentage of the sales prices came down to 124,020 K per square meter. This increase was caused by a new offer of exclusive properties in prime locations. Differences in sales prices reflect the situation in the previous period, i.e. reflect the quality of real estate in a given location. Old apartments in panel houses and apartments before reconstruction recorded a dream. Prime real estate has hit its mark.
A typical example is Prague 9, where we recorded a sharp drop in offer prices by 7.1%. The most significant increase in prices by 5.4% can be traced to Prague 6, where lucrative real estate, which clients withdrew in the most critical period in order to avoid inappropriate sales, reappeared in the offer. He gave a dream sale price not on the order of the day.
The premium segment is dominated by small apartments
Investment volumes in small apartments are constantly growing. The total price for the property is decisive, comments on the situation on the prime real estate market Polkov and others: Buyers with regard to the final price always prefer small apartments. Their priority is the quality of real estate, which does not lose its value due to the small space. Get used to the demands for a standard and equipped apartment building and the apartment itself.
Sales of 2+kk decreased from 45% to 36%, while 1+kk increased from 27% to 31%. The difference between the offer price and the sale price points to the developer’s motivation to come out to all clients. Kivka sales volume is growing. The Oiven transaction is also reflected in all 3+kk apartments, which increased from 16% to 19%. Thus, sales of 4+kk increased from 7% to 11%. Only the most luxurious penthouses in 5+kk and 6+kk layouts recorded a decrease in sales volume. The percentage difference in the floor is probably caused by the limited supply.
Autumn sings mortgages
Mortgage volumes bounced back from the bottom in the summer months and confirmed that the worst of the market is out. In addition to the optimistic sentiment, the slight regulation of the NB helped. Mortgages are available from lta. NB abolished the requirement for a maximum limit of DSTI (ratio of loan payments and monthly income). The new situation gave banks the opportunity to independently decide on their own policy. The conditions have been relaxed for all large and half of the medium-sized banks, the balance parameters are better today and the differences between individual banks have narrowed. The willingness to approve two unavailable exceptions in drainage cases also increased. The change positively affected at least 1520% of mortgage clients. The average mortgage for an apartment in Prague is around 5.85 million CZK.
The demand for its housing is growing, the price is slower
In the last six months, the number of locations in the Prague area has grown steadily. By an average of five percent, we observed the most significant increases in Prague 8, Prague 6 and Prague 7. The pace of growth has been slowing down in the last year. However, we expect a sharp increase in the demand for such housing, taking into account the low availability of owner-occupied housing.
Institutional rents will be the result of the growing difference in the rental prices of older apartments compared to new, often fully equipped projects with low energy efficiency, which also provide various types of services. Individual projects are divided into different groups, where, on the one hand, there is the provision of affordable housing for demanding professions, and on the other hand, the offer of luxury housing combined with extra services. Among the most important institutional providers of German housing in Prague are five companies: AFI EUROPE, CREDITAS Real Estate, CTR, Dopuspn vydlen esk spoitelny, Heimstaden, Kooperativa pojiovna, Luka Residential, Mint Living, Prague Archbishopric, Zeitgeist Asset Management, Trigema. Completed gentle projects create in the core of primary owners.
Knight Frank & Rutley was founded in England in 1896 as a company dealing with appraisals and auctions. Today, Knight Frank is considered a strong player in the field of commercial and residential real estate advisors. The whole world includes 488 branches in 57 countries on 6 continents and more than 20,000 professionals.
During its more than twenty years of activity in the Czech Republic, the Knight Frank company has become one of the leading companies in the areas of real estate consulting, real estate, office leasing, real estate, market research and international investments. It specializes in commercial, industrial and residential real estate. It provides comprehensive advice to property owners, investors, developers and corporate clients.
More information at: www.knightfrank.cz/