Czech real estate market stabilizes as apartment prices remain stable and house prices drop

by   CIJ News iDesk III
2024-09-30   13:58
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In September, the Czech real estate market saw little change in apartment prices, while family houses experienced a decline. According to a recent analysis by Valuo, apartment prices were virtually unchanged month-on-month, while family houses saw an average price drop of 2.6 percent compared to the previous year. Despite the drop in house prices, rents have continued to rise, increasing by 4.5 percent year-on-year.

The analysis indicates that the Czech real estate market is in a state of stabilization. Mid-sized apartments that were not newly reconstructed recorded the largest year-on-year price increase, rising by 0.7 percent. Small apartments in new buildings also saw a price bump of over 0.5 percent. In contrast, large apartments in very good condition experienced the smallest rise, with a 52.5 percent increase over the last four years.

Family houses, particularly those in need of renovation, have not yet fully recovered from the price drops experienced since mid-2022. Homes requiring reconstruction saw price declines, with small houses falling by 5.7 percent and large houses by 5.3 percent compared to the same time last year. However, new homes fared better: prices for new medium-sized homes rose by 1.5 percent and large new homes increased by 2.4 percent. Notably, new small houses saw a substantial price rise of 73 percent since 2020.

Rental prices, on the other hand, have been steadily increasing across all types of housing. The largest year-on-year growth in rent was recorded in small apartments in very good condition, which saw an increase of 5.5 percent. Rents for small apartments in good condition also rose by 5 percent year-on-year. In contrast, large apartments in new buildings saw a smaller rental price increase of 3.9 percent.

The analysis also highlighted that the gap between the initial asking price and actual sales price for apartments has decreased in 2024. The difference between the first bid and final sale price dropped from 8.4 percent last year to 4 percent this year. Similarly, the difference between the last bid and sales price fell from 2.6 percent to 1.5 percent.

The trend of rising rental prices across all housing categories is expected to continue. Small apartments in good condition, for instance, have seen a 25.8 percent increase in rental prices since January 2020, while medium-sized new apartments saw a 24 percent rise during the same period.

Deloitte’s latest data also shows a 4 percent increase in apartment prices in the first quarter of this year, with the average price reaching CZK 99,300 per square meter. Additionally, rents rose by 3.4 percent quarter-on-quarter in the second quarter, reaching an average of CZK 305 per square meter.

FérMallé.cz reported that older family homes that underwent reconstruction in the second quarter increased by an average of 3.1 percent year-on-year, with the average square meter price reaching CZK 38,571.

In summary, while apartment prices have remained stable in recent months, family homes—especially older ones—have seen price reductions. However, rental rates continue to rise, signaling ongoing demand for rental properties across the country.

Source: Valuo, Deloitte, FérMallé.cz and CTK

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