Prices of new apartments in Brno fell slightly in the 3rd quarter - sales stagnated

The growth in prices for new housing in Brno has stopped, the average price per square meter has fallen slightly. While in the 2nd quarter of this year the average offer price of new housing per square meter reached CZK 127,200, in the 3rd quarter it fell to CZK 126,500. The average price per square meter sold in new buildings fell even more significantly. Trikaya, which has been monitoring data on the market for new apartments in Brno for a long time, reported on this in its regular quarterly analysis. The sale of new apartments, which was the lowest in a decade, also fell significantly.

"As was already evident at the beginning of the summer, the market is indeed going through a noticeable cooling. Due to rising inflation and especially due to the increase in housing costs, the caution of buyers is noticeable. And this applies not only to end customers, but also to investors. We assume that this development will continue this year continue," said Trikaya CEO Dalibor Lamka.

New apartments in Brno were sold in the 3rd quarter of this year for at least the last ten years, according to Trikay, it was 70 apartments, i.e. not even half of the sales in the 3rd quarter of 2021. At the same time, the offer of apartments on the market is greater than in previous years, on the market there were 1,233 apartments at the beginning of September.

The decline in interest in apartments was also reflected in prices, especially those for sale. While the offer price decreased by CZK 700 from the 2nd quarter of this year, the average price per square meter sold decreased by almost CZK 10,000.

According to František Šudřich, the director of the company Impera Styl, who has been following the development of the market for a long time, it cannot be expected that the prices of new apartments in Brno would fall dramatically. "In the current situation, it can be assumed that prices will fall especially for properties that meet two basic conditions: the seller needs to sell the property because he has other obligations that he must pay, and for properties that the seller will not make a profit on selling, even if the price is reduced," he said Shudrich.

For the currently offered apartments, the most expensive per square meter is in the available 1+kk apartments, where it starts at CZK 137,000, the available two-room apartments with 2+kk cost an average of CZK 126,500 per square meter, for the 3+kk apartments, the current average price is CZK 128,500 per square meter.

According to representatives of construction companies, the prices of new buildings sold directly by developers cannot fall. "The prices of new buildings cannot go down very well, because the costs of implementation are constantly increasing. The sales prices should therefore logically rise. However, we do not expect a large increase in prices in the coming months," said Jiří Heinl, sales director from IMOS development.

According to Tomáš Kaláb from the development company Kaláb, those development companies that do not have enough cash to repay their obligations to external investors will have to make the apartments cheaper. "For example, we are in a situation where we can do without any further sales for about twelve months. I think that is an exceptionally long time in our field. But it is not forever," Kalab pointed out.

According to Šudřich, development companies will rather approach the suspension of their projects and further construction. "We have suspended a large part of the housing projects being prepared and are waiting for the development of the situation. We are not under pressure to sell out the apartments quickly, but we firmly believe that the drop in demand is temporary and does not indicate a long-term trend," said Šudřich for Impera Styl.

Source: CTK