Czech Property Market: Over 60% of Czechs Expect 3-5% Rise in Property Prices in 2023

Prague, November 6, 2023 – A recent survey conducted by the Ipsos agency has shed light on the expectations and sentiments of Czech citizens regarding the property market. The survey reveals that more than 60% of Czechs anticipate a modest increase in property prices, both in rentals and new home sales, ranging from three to five percent for the current year. However, the optimism is tempered by concerns over decreased property value due to inflation, expressed by over half of the property owners surveyed.

Martin Novak, an analyst at Broker Consulting, commented on the findings, stating, “People have a realistic overview of current mortgage interest rates. On average, they estimate the interest rate for a three-year and five-year fixed mortgage to fall between 5.5 percent and seven percent.” This suggests that Czech citizens are well-informed about the financial aspects of the property market.

While the survey indicates that apartment sale prices have somewhat stabilized following a surge in the summer, rental prices continue to exhibit an upward trend. This trend is observed in both of the Czech Republic’s major real estate markets, Prague and Brno.

The survey also highlights the financial prudence of Czech citizens, as two-fifths of respondents have either saved or are currently accumulating resources for a planned property purchase or renovation. Additionally, a third of those surveyed anticipate taking out a mortgage to cover these expenses, underlining the importance of mortgages in the property market.

One of the key findings is that over three-quarters of respondents attribute high prices in the real estate sector to high-interest rates. Currently, more than a third of those surveyed already have a mortgage, illustrating the significant role mortgages play in the real estate landscape.

In comparison to the beginning of the year, respondents appear to be more optimistic about the development of housing prices, especially in the context of rentals. However, more than half of those surveyed still perceive housing prices as being very high.

Martin Novak provides an insightful perspective on the survey’s findings, suggesting that “a part of the population perceives economic reality through the rear-view mirror. For example, a few years ago, when mortgage rates were at a record low, people arranged short fixes with the expectation that rates would continue to decrease. However, in hindsight, it would have been more prudent to secure the longest fixation possible at that time.” This reflection underscores the dynamic nature of the property market and the importance of informed financial decisions in this sector.

Article by Prague Forum

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