Almost 47 percent of the real estate brokers surveyed said that interest in real estate in the second half of last year even exceeded demand in the first half of the year. A further 40 per cent of brokers evaulates interest in property in the first and second halves of 2021 as roughly comparable.
“Real estate has become significantly more expensive in the past two years, and last year the prices of energy, building materials, construction work and, last but not least, interest rates on mortgages also rose extremely. In addition, from April this year at the latest, those interested in a home loan must prepare for stricter conditions for obtaining a loan (note: ČSOB is introducing stricter conditions for applications submitted from 1 March 2022). These are the main reasons why many Czechs have decided to resolve the issue of owning their own home as quickly as possible,” adds Veronika Hegrová, Sales Director of hyponamiru.cz, on the developments in the real estate market.
Vacant properties decreased
In the second half of last year, the supply of available properties on the market narrowed even further. Compared to the first half of the year, 60 percent of the real estate agencies surveyed had fewer properties on offer. Not only families looking for their own home or a place for recreation, but also private investors and investment funds applied for flats, family houses, building plots and cottages in attractive locations. “Since 2010, real estate prices in the Czech Republic have doubled and many consider it a profitable and relatively safe asset. Especially in the last two years, property prices have been rising at a very brisk pace. At the end of last year, we witnessed rapidly rising inflation and many Czechs, in an effort to protect their personal finances from devaluation, did not hesitate to invest their spare money in real estate,” explains Lukáš Komínek, an analyst at hyponamiru.cz.
Interest in apartments in cities continue
As in the first half of last year, interest in older properties prevailed in the second half of the year. The reason for this is the fact that there are significantly fewer completed new buildings for sale on the market. In many places, construction is slowing down, mainly due to the lack of available building plots and missing infrastructure. If a suitable plot is found, the process of obtaining a building permit is very difficult and lengthy.
Translated with www.DeepL.com/Translator (free version)
Veronika Hegrová adds to the survey results: “The greatest demand has long been for apartments in large cities, and this was no different in the second half of last year. More than two thirds of people showed interest in this type of property. In recent years, the demand for living in one’s own family home in the countryside has been growing. The most desirable locations are those close to larger towns with good civic amenities. The prices of houses in cities are now high and buying a property in the countryside is more affordable.”
One fifth of properties find buyers within a week
The current situation on the real estate market is very advantageous for sellers. Not only do they find it easier to get the price they want, but they also usually find the right buyer very quickly. According to real estate agents, approximately one fifth of the properties on offer are sold within a week, half within a month and one fifth of the sellers find a buyer within two months.
In the second half of 2021, in 47 percent of cases, between 5 and 9 bidders applied for one property. In the other 47 per cent there were even more potential buyers, between 10 and 19.
Czechs are looking for properties up to five million crowns
Not surprisingly, price is also a key factor for Czechs when choosing their own property. “The most desirable properties are under CZK 5 million. A fifth of those interested are looking for a property in the price range of three to four million crowns. Less than half of buyers are willing to pay between four and five million crowns for their own home,” says Lukáš Komínek. As in the first half of last year, young families and couples aged around 30 dominated the second half of the year among those interested in buying their own home. The second largest group was young people in their thirties living independently.
Financing your own home
According to the experience of the real estate agents interviewed, more than half of the people buy property on credit. About a quarter of buyers cover the entire purchase price from their own savings. Approximately one in ten asks for financing recommendations directly from the real estate agent.
Financing a property with a mortgage became more expensive in the second half of 2021. “While at the beginning of last year it was still possible to achieve a rate of around 1.5 per cent, at the end of that year the average rate climbed to three per cent. ČNB – the Czech National Bank has been raising base interest rates in an effort to curb high inflation, and mortgage providers have been quick to reflect this rise in their rates. In the last quarter of last year, the average amount of a mortgage also rose slightly – in the case of a mortgage, it was CZK 3.6 million. Most often, people arranged mortgages for the purchase of a family house and an apartment,” Veronika Hegrová explains.
Some applicants did not get a mortgage
The survey among representatives of real estate companies also showed that the number of cases in which people failed to get a property appraisal increased by about a quarter and they had to abandon their intention to buy.
Veronika Hegrová adds: “We only record units of clients who could not make the purchase due to a non-existent appraisal. We always help clients to find alternative sources of financing, i.e. additional financing from another bank, the possibility to take 90% LTV, provide the bank with additional collateral, etc.”
We would like to thank the companies Úvěrové Centru Realit, Frami real, DOMA real estate brokers, Reality Kuchtíčková – Ing. Monika Skutecká, REAL SPEKTRUM BOSKOVICE, Development Minářová, Prima pronájem a reality Jihlava, ENKORY, REAL SPEKTRUM, ALVA REAL, ERA Reality, NETX REALITY and many others.