Czechs are borrowing more than ever to buy Christmas presents for their relatives and friends, suggests a survey carried out among the country’s non-banking consumer lenders. In the months preceding the festive season, loan firms are traditionally recording an increase in the number of loan applications.
In recent years, Prague has seen a surge in the number of people offering their rooms and apartments for rent. In fact, every fifth apartment in the downtown area is now rented out via Airbnb or similar services, according to a new study. But experts say fears of city centre depopulation may be exaggerated.
The average mortgage interest rate rose in September to 2.57 percent from
2.53 percent in August, according to Fincentrum Hypoindex.
Despite higher rates, the number of applicants surged as people sought to get mortgages before tougher lending guidelines came into effect on October 1.
Under the new guidelines set by the Czech National Bank, a borrower should not be eligible for a loan greater than nine times their annual net income or have to spend over 45 percent of their monthly net income to service the debt.
The average mortgage interest rates in the Czech Republic are the sixth
highest in EU, suggests a study carried out by the website ChytrýHonza.cz,
based on data from Eurostat, the European Central Bank and Crédit Foncier.
According to the data, interest rates on mortgages in Europe range from 1.09% in Denmark to 4.4% in Poland. In the Czech Republic, the average rate is 2.2%. However, the level of indebtedness of the Czechs is not as great as, for example, that of the French.
The availability of housing in the Czech Republic is the worst in Europe, with a new flat amounting to 11.3 multiple of an average annual income, suggests a study carried out by the international consultancy Deloitte in 14 European countries. Last year, Czechs needed 10.9 of an average annual income to buy a new 70 m2 flat.
Stricter mortgage rules, in force since October, apply not only to new
contracts but also to refinancing existing housing loans, the business
daily Hospodářské noviny writes, citing a central bank spokesperson.
According to the report, this is in direct contradiction with what the Czech National Bank governor Jiří Rusnok said in June, taking some commercial lenders by surprise.
It takes Czechs considerably longer on average to save to purchase an
apartment than people in other European states, suggests a new study
produced by consultants Deloitte.
Comparing 12 states last year, the report found that a new flat in the Czech Republic is equivalent to 11.3 years of average pay. Belgians, meanwhile, need the equivalent of 3.7 years’ salary to cover the price of a property of 70 metres squared.
A lack of new apartments on the market is one factor forcing property prices up in the Czech Republic, said a representative of Deloitte. Mortgage regulations, lengthy permit procedures, high taxation and consumer sentiment are other factors.
Czech economic research institute CETA (Centrum ekonomických a tržních analýz) published a study focused on the residential housing market in Prague on Friday, which claims that bureaucratic hurdles, coupled with high demand, are primarily responsible for the current low availability of housing in the capital. It also claims that Airbnb flats, which have been the centre of focus for many councillors, are not to blame.
On Monday, the minister of labour and social affairs called for a wide-ranging interdepartmental effort to sort out the issue of rogue landlords preying on families living in socially excluded localities. A list of 15 specific measures will act as a common thread in the preparation of a series of government proposals aimed at limiting the poverty trade business.