How’s real estate market going in Prague?
Luxury real estate market in Prague registered a sharp decline at the end of 2022 compared to the previous year’s sales. However, prices are holding up and rents are rising by about 25% in the city centre, they have reached an average of 42.000 czech crowns per month per flat. The prices of rents for smaller dwellings are growing the most, and among new contracts those agreed with foreigners prevail. This is indicated by the Market Report for the fourth quarter of the Svoboda & Williams agency which specializes in the premium real estate market.
Furthermore, in the last months of 2022 demand for purchase of luxury real estate dropped by about 37% compared to the previous year. The overall trend in flat sales is going down 26% compared to 2021, and in the case of family villas the drop was 42%. This is the result of a survey conducted by the web portal “Valuo.cz”, which used data from the land registry and houses on offer. Interestingly, despite this, prices did not fall significantly but, on the contrary, rose slightly, to an average of around 153.500 crowns per square metre.
Due to high interest rates, the share of buyers resorting to mortgages is falling sharply. In fact, the average mortgage rate reached a level of 5.98% in December, one of the highest in the last 20 years. In 2022, banks and building savings banks granted a total of 197 billion crowns in mortgage loans, 64% less than in 2021. It is expected that these trends will tend to increase further in the coming months, at least until inflation starts to fall and interest rates start to fall as well.
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