The housing market in the Czech Republic has witnessed a notable price escalation in recent years, defying the economic challenges posed by the pandemic. Following a marginal decline in 2022, prices for flats available for sale in the country’s major cities experienced a resurgence in 2023. According to data from Sreality.cz, a 75-square-meter flat in a panel house in Brno now commands a price of 6.75 million crowns, reflecting a seven percent increase from the previous year. Notably, only newly built flats in Prague exhibited a slight decrease in price.

In January, offer prices for flats in the capital city surged by five percent annually, with even higher increases observed in Ostrava, where prices rose by nine percent, surpassing the growth rate in Brno. While sellers in Prague sought an average of 121,500 crowns per square meter, prices in Brno averaged 95,500 crowns, and in Ostrava, it stood at 47,000 crowns.

Šarlota Smutná, a data analyst at Seznam.cz, highlights a shift from a period of falling prices at the beginning of last year to a subsequent stabilization and slight increase in prices. This trend was particularly pronounced in cities where prices surged by several percentage points after a year.

Interestingly, the number of advertised properties saw a significant decline in year-on-year comparisons, dropping by as much as fifty percent in some areas. Only in Ostrava did the number of offers experience a slight increase, albeit modestly.

Furthermore, the lowering of interest rates by the Czech National Bank has led to average mortgage rates trending towards four percent. Hana Kontriš, manager of industry services at Seznam.cz, expresses optimism regarding the prospect of increased buyer activity amidst favorable interest rate conditions. However, she emphasizes that a more substantial rate decrease would likely exert a more significant impact on market dynamics, signaling potential shifts in the housing landscape.

Article by Prague Forum