growing demand along with prices for the real estate in Prague - Preco Group

growing demand along with prices for the real estate in Prague

growing demand along with prices for the real estate in Prague

The Czech Republic real estate market is waking up after a long sleep from the moment of an industrial and financial crisis in 2008. Property prices are growing along with the demand for housing.

Market awakening can be attributed to the stable economic situation in the country, but primarily to the favorable mortgage conditions. Currently, the interest rates on mortgages reached its minimum level, around 2%.

For instance, the number of sold apartment in Prague in a newly build residential projects is growing for the past five years, reaching 5,600 units, which is the highest number since the 2007.

In a recent months the prices for new flats has increased significantly while the prices for homes were rising slowly for a year long. The price grow for housing is noticeable in Prague, Brno and Central Bohemia regions. In the cities of Ostrava and Olomouc there is still a stagnation. In Ostrava, there is a grow in demand for the larger, 3 – 4 bedroom apartments, so we can predict the rise in price for those units as well.

There is a high demand for smaller apartments in Prague; the percentage of real estate acquired for investment purposes accounting for 30% from the total sales of residential properties.

According to the Peter Nemachek, the head of real estate department of the Hypoteční Bank, in 2014 we can expect the growth in property prices at the level of 3% – 5%.

Despite the current optimistic picture of rising prices, anticipate anything substantial is too early. The price grow is noticeable, but for how long, the only time will show, says Martin Lukes, the Academy of Sciences in the Czech Republic, Sociology Faculty.

Actively growing prices, particularly for new apartments currently has reached their crisis level, according to the statistics from Mortgage Bank of the Czech Republic.