The prices of new apartments and houses will rise again. According to a survey by the analytical company CEEC Research, more than eighty percent of development companies are planning to increase the price of newly built projects. On average, the price could grow by up to seven percent per year.
Half a year ago, a fifth of the development companies planned to raise prices. At the same time, they planned to increase apartment prices by “only” 4.6 percent on average.
“After about two years of stagnation, the prices of new apartments have returned to growth this year. Offer prices in Prague have even broken their previous highs. For this year and next year, I expect that the price of new apartments will continue to rise,” said Dušan Kunovský, founder of Central Group.
The offer is not enough
According to experts, the reason for the price increase is the ever-increasing demand, which is no longer sufficient due to the stagnant supply of housing on the market. In the second half of this year, according to an analysis that was published on Thursday at the Meeting of Czech Construction Leaders, interest in new housing in the whole of the Czech Republic should increase by five percent.
The development is influenced by the reduction of interest rates by the CNB and the subsequent discounting of mortgages. “They are gradually coming to the market and will continue to receive projects that were suspended at the time of high mortgage prices. The gradual reduction of rates is visible throughout this year and I assume that it will continue in the future,” confirms Michal Hrbatý, director of the Ulov Domov company.
An increase in the availability of mortgage financing will mean a renewed interest in buying real estate and, with it, an increase in their prices.
According to David Šiller, the commercial director of the Wood system, a similar situation in the area of supply will continue into the next year. However, the current problems with building permits will gradually start to be reflected in the market.
“It will depend a lot on how long it will take to correct the current state of digitization. On the other hand, demand will continue to increase, as the lack of housing and the housing crisis have not disappeared,” Šiller said during the debate.
Developers are going to build
Although problems with the digitization of construction management could gradually begin to be prescribed in the offer, this year and next year the number of new apartments for sale could still grow.
According to developers who participated in the CEEC Research survey, the supply of real estate will increase by 2.5 percent compared to the first half of this year. The outlook is even more positive for the first half of next year, as supply is expected to grow by a further 3.8 percent.
“In the long term, the state of supply can be characterized as persistent and insufficient, especially in large cities, but in this respect I am slightly optimistic for next year and expect an increase in supply. If we compare the first half of this year, when we recorded a significant increase in sales, and thus a considerable emptying of the offer, then there may be an increase compared to that period next year, even in tens of percent,” said Jan Řežáb, owner of JRD Group.
At the same time, he added that the decision of developers to launch their large projects, which are now in preparation, will have a great influence on the numbers.
