Prague inhabitants with an average salary would have to work for nearly fifteen years for a flat of approximately seventy square metres, if they didn’t have any other expenses, suggests a study by the developer company Central group. Just a year ago, Praguers needed to work less than 14 years to acquire a flat, while in 2014 it was less than ten years.
The growth in apartment prices in the Czech Republic is expected to come to
a halt this year, according to a survey carried out by the Association of
Real Estate Market Development, released on Tuesday.
Last year, prices of apartments across the country increased on average from six to ten percent. The highest growth rate was recorded in Prague. In the first quarter of 2019, the price of new flats increased by nearly a fifth year-on-year to 104,666 crowns per square metre. Since the mid-2015, prices of Prague apartments grew by nearly 90 percent.
The Prague City Hall coalition is due to meet on Friday to discuss a controversial proposal to collect anonymous data from electricity meters to identify vacant housing units. Mayor Zdeněk Hřib of the Pirate Party, which is behind the move, says despite alarm calls by his coalition partners, the intention was never to try to identify the owners of vacant properties – whether ‘foreign speculators’ or local investors – in order to tax them.
Interest in rental housing has seen a significant rise in recent months, in
response to the central bank tightening mortgage rules, the ctk news agency
reported citing real estate companies.
The interest in rental housing has driven rents higher, by an average 3 percent in Prague (to 340 crowns per square metre) but as much as 11 percent in the most lucrative areas.
The monthly rent for a medium-sized two-room flat in Prague is now between 15 to 19 thousand crowns, depending on its proximity to the city centre.
The volume of new Czech housing loans declined in December to the lowest
level in two-and-a-half years. The drop was driven by stricter
recommendations from the central bank and strong frontloading in the second
half of 2018, ING says.
The total volume of housing loans slowed to 23.8 billion crowns in December. Looking at new loans without refinancing, the volume declined to 14.8 billion, the lowest figure since mid-2016.
This development most likely was driven by substantial frontloading of mortgages during June-October last year, before stricter central bank recommendations kicked in. In 2019, the market expects the volume to fall by around 10 percent, according to ING.
Building owners and housing co-operatives are demanding government help in enforcing and expanding their rights to collect payments from errant tenants or allow for their eviction, or force the sale of flats to cover debts. Many housing co-operatives across the country face bankruptcy, the groups say, due to tenants’ and co-owners’ failure to pay utility and other bills.