Real estate prices grow further in Q2.
Market prices of flats, family houses and plots of land kept growing in the Czech Republic in the second quarter of this year, with prices of flats rising the most and prices of land plots the least, Hypotecni banka told CTK in a press release. The HB Index, which monitors real estate prices, shows that prices of flats increased by 12.8 percentage points yr/yr to 133.6 points in the second quarter of 2017. Against the previous quarter, prices of flats rose by 4 percentage points.
The BH Index's basic value of 100 points represents the real property prices as of January 1, 2010. Compared with that date, prices of flats went up by some one third. "The grows pace keeps quite a dynamic character. Prices grew in all regions. The highest increase was seen in the Zlin, South Bohemia, Central Bohemia, Moravia-Silesia and Karlovy Vary regions," said Hypotecni banka real estate department director Petr Nemecek. "We registered the lowest growth in the Olomouc Region where the prices are already at their high. The same as in the previous period, prices of older flats in prefabricated houses grew more than prices of flats in brick houses," he added. "The share of foreign owners from Western Europe, Israel and China grows," Nemecek remarked.
Prices of family houses went up by 8.2 percentage points yr/yr to 124.4 points and by 2.3 percentage points against the previous quarter. "Prices of family houses grow at a stable pace, the growth is the same as in the second quarter of the previous year. The main problems for those building family houses are a long time needed for the supply of building materials and full capacity of construction companies," Nemecek remarked. Timber houses have roughly a 10 to 15 percent share in the whole market. Developer projects are implemented mainly in the Central Bohemia Region and near regional capitals with a good transport accessibility.
Prices of plots of land rose by 6.6 percentage points yr/yr to 145.4 points and were 2.9 points higher against the first quarter of this year. "Demand for plots of land is stable as is insufficient offer. High prices near big towns force people to look for suitable localities in remoter places," Nemecek said. For the third quarter of this year, Nemecek expects the market to be influenced by the approaching regulation of the Czech National Bank (CNB) which will toughen rules for providing mortgage loans even more as of October.
Real estate sales should thus grow faster until the end of September and sink after that time. "Due to the high prices and worse accessibility of mortgage loans, part of potential buyers will opt for tenement housing. This may cause a moderate growth in market rents," Nemecek added.
HB Index, which has been monitoring prices of flats, family houses and land plots, is based on real estimates of market prices of property Hypotecni banka clients have purchased via a mortgage loan.