Prices of flats, mortgages, rental housing, the abolition of real estate acquisition tax, new building law…. These are key issues that are currently being addressed in the real estate market. Whether you are looking for exclusive housing in Prague, you are interested in investing in an apartment for rent or you want to sell your existing property profitably, you should closely monitor the current situation.
According to an analysis by the consulting company Deloitte published in early September, housing prices in the regional cities of the Czech Republic rose by 10.4 percent year on year in the second quarter of this year. Compared to the previous quarter of this year, prices were up 2.4 percent.
The average price per square meter in the past quarter was 67,000 crowns, while the most expensive were again apartments for sale in Prague, with an average price of 88,700 CZK / sqm. The year-on-year increase in prices in the metropolis was 5.3 percent. However, those interested in buying flats in Liberec (by 27.6 percent) and Ústí nad Labem (by 24.7 percent) felt the biggest increase.
The number of flats sold in the second quarter of 2020 was less than 6,200 units, which is a year-on-year decrease of 5.9 percent, and Prague accounted for about three-fifths of it. Of the total volume, about half were development projects, about 20% were brick houses and about 27% were blocks of flats. These showed the largest year-on-year increase in prices (15.3%). "Despite the situation with the coverage of Covid-19, we are registering great interest in buying apartments. However, we are beginning to observe increased caution of buyers, which is why the actual implementation of transactions is delayed. One group is more considering whether to make a purchase due to the crisis that their situation may worsen in the future. The second group speculates on a possible decline in prices in the coming period if a really economically-difficult period comes, "says Jiří Kučera, director of the Luxent-Exclusive Properties real estate agency.
The mortgage market broke the record in July this year. According to Fincentrum, Hypoindex became the strongest seventh month in its history. The July volume of 21.597 billion meant a year-on-year growth of more than six billion. Compared to June this year, it was an increase of 650 million. Although a slight decline to 19.173 billion was recorded in August, according to the monitored data of the Hypoindex, August still became the strongest eighth month in history. At the same time, the interest rate fell for the fifth month in a row. The average interest rate was 2.11 percent in August, while in July it was 2.15 percent.
As for the average value of mortgages, it rose to its all-time high in August – almost 2.8 million crowns. Jiří Kučera, Director of the Luxent – Exclusive Properties real estate agency, adds: “The increase in the average amount of mortgage loans provided, especially in the last year, is the result of several phenomena on the Czech real estate market. The main thing is the constantly rising real estate prices when even the events related to the situation around the Covid-19 disease did not stop this growth. Relatively optimistic expectations of the development of the economic situation in the Czech Republic before the pandemic in 2019 stimulated interest in mortgage loans. In the spring of this year, another impetus was the easing of the Czech National Bank's restrictive measures for their provision."
The abolition of the real estate acquisition tax, which amounted to 4% and thus meant a significant amount of tens to hundreds of thousands of crowns for buyers, has a significant effect on the real estate market. The tax will expire retroactively from March 31 this year and applies to people who completed the cadastral deposit in December 2019 or later. Its abolition has the greatest impact on the secondary market, ie older real estate because new buildings under 5 years of age were not affected by this tax.
In the original government proposal, it was assumed that for new housing loans granted after 1 January 2022, buyers could not deduct the interest paid from the income tax base. Due to a wave of criticism, an amendment to the Senate was finally approved, which maintains the deductions and only reduces them to CZK 150,000 from that date. The law has already been signed by President Miloš Zeman.
The situation in the rental market is somewhat different. The offer is growing, especially in the center of the capital, as clients from abroad have decreased due to the pandemic and travel restrictions. This is associated with a significant drop in prices. You can easily rent luxury apartments in Prague even 10 percent cheaper year-on-year. In addition, landlords who previously offered apartments for short-term rent (for example via the Airbnb service) are now choosing a longer-term option to curb tourism. Thanks to the greater availability of lucrative locations and lower prices, interest in rental housing are rising.
In August this year, the government approved a draft of a new building law from the workshop of the Ministry for Regional Development, headed by Minister Klára Dostálová (for ANO). It should mainly reduce the permitting process, from an average of 5.4 years to one year, and make construction more efficient overall. The Ministry of Regional Development would like to bring the law into force in the spring of next year. The effectiveness should then gradually take place by mid-2023.
The bill now has to pass through the Chamber of Deputies, where a great struggle for its form is expected. The opposition in particular has considerable reservations, which seem unresolved. Prague and the Institute of Planning and Development do not spare criticism either, as the law intends to repeal the Prague Building Regulations. Prague Building Regulations has been an implementing regulation to the Building Act since 2016 and sets out general requirements for the capital city of Prague.
Life & style
16. 5. 2022
Are you dreaming of a new exclusive property near Prague, but at the same time close to nature? Now we have launched the sale of luxury houses in the second phase of the development project Březový háj, which is growing in the village of Předboj. It includes 4 original family villas of 6+kk and 7+kk with gardens, terraces and swimming pools - and their construction has already started! Despite the situation on the real estate market, where, among other things, prices are rising due to a shortage of building materials, interest in the project is huge. Of the sixteen houses in the first phase, only the last one is currently available for purchase. Their implementation will be completed at the turn of this spring and summer, and the entire project with the second phase should be completed in the summer of 2023.
9. 5. 2022
The steep rise in real estate prices, the rising cost of mortgages and the deterioration of their availability, inflation, the rise in prices of building materials and the shortage of building materials - this is the current situation on the real estate market. However, even this does not discourage those interested in luxury housing or a profitable investment. The demand for new flats, especially in Prague, still significantly exceeds the supply. The huge interest is also evidenced by the fact that in many development projects from our portfolio the last units remain to be purchased. In order to at least partially satisfy the "hunger" for luxury new buildings, work is in full swing. Let's take a closer look at the current developments!
15. 3. 2022
The interest in real estate, especially recreational ones, is still enormous. However, since the domestic supply is not able to cover it, Czechs are now turning their attention more and more abroad, for example to Slovakia. A development project called Marina Liptov, which comprises 33 modern apartments in layouts from 2+kk to 4+kk, is growing right next to the Slovak dam Liptovská Mara on the Váh River under the Tatra Mountains. They offer the possibility of active relaxation in their own facilities in a popular Slovak recreational location as well as the opportunity for a promising investment in an apartment. The project should be completed by the end of next year. Our Luxent - Exclusive Properties office has become the exclusive partner for their sale in the Czech Republic - let's take a closer look now!
19. 1. 2022
Winters are relatively mild in our area, but if you have a warm heart, you may miss the sunshine during the cold months. And if you experience these feelings every winter, you might want to consider investing in an apartment in a warm climate. Find out what's trending right now and which luxury properties abroad you can choose from in this article!
12. 1. 2022
Do you want to go skiing or cross-country skiing? Wondering where to spend your spring break with family or friends? Get yourself a holiday property in the mountains! You will see that you can choose from our range of exclusive properties in renowned domestic resorts in no time.
3. 1. 2022
It can already be said with certainty that 2021 will go down in mortgage history as a record year - whether in terms of the volume of mortgages arranged due to huge interest or above-standard interest rate increases. We will now take a closer look at the various factors that have shaped the mortgage market in recent months and will also be reflected in the period ahead.
28. 12. 2021
The luxury segment, comprising unusual properties in prestigious locations, forms a distinctive part of the residential market. And it has its own special requirements. Properties that are the focus of our real estate agency Luxent - Exclusive Properties require professional brokers with perfect knowledge of the specifics of this market. They will now take you on an excursion into the world of exclusive real estate with a few selected, untouched gems!
2. 12. 2021
The jewel of our real estate agency Luxent - Exclusive Properties' portfolio are two building plots with building permits for luxury house development projects - Nad Šáreckým údolím in Prague 6 and Zahrada snů in Prague 8. The common feature of the buildings is the emphasis on the highest quality materials and equipment, the pursuit of maximum energy efficiency and also a sensitive setting in the space that honours the genius loci. You can start building your home as soon as you purchase the land. You'll also appreciate the fact that both have now seen a significant price adjustment!
10. 11. 2021
In the popular Krkonoše resort of Harrachov, an intimate project Harrachov Peaks is growing, which includes 16 unique units, including three exclusive penthouse duplexes. Our real estate agency Luxent - Exclusive Properties has launched an exclusive sale of luxury apartments with layouts from 1+kk to 4+kk. But don't hesitate for long, the huge demand for holiday properties is definitely not going to subside! Mountain residential house offers the possibility of a second home in nature and at the same time an investment opportunity. The project is scheduled for completion in December next year, and you can look forward to the handover of the units in January 2023.
8. 9. 2021
In an attractive location of Prague 5, on the border of Smíchov and Radlice, directly below Dívčí hrady, construction of an original and timeless development project - the Garden Lofts residence in industrial style has started. The building includes 22 luxury apartments with terraces, balconies or front gardens. They are now exclusively for sale by our real estate agency Luxent - Exclusive Properties. The project will be completed in the spring of 2023. The construction is being carried out by the renowned construction company Swietelsky.