"The rapid rise in real estate prices is currently the most significant inflationary phenomenon, or in the last two to three years. The year-on-year increase in these prices reached 12.8% in the first quarter. This has put the Czech Republic to the top position among the EU countries," said chairwoman of the Czech Statistical Office (CSU) Iva Ritschelová. Average annual price growth of appartments in the EU was 4.5% in the first quarter.
Since 2000, the growth rate of domestic housing prices has soared for the third time. It went up significantly in 2003, before the Czech Republic joinined the EU, and in 2008, in connection with the real estate boom in many European countries. The current growth phase began in 2014. Since then, real estate prices have been steadily rising and exceed even their historic highs. In the EU, the trend is similar. The reason is both the current growth of the Czech economy and optimistic expectations and, on the other hand, the low interest rates on mortgages.
In the long term, property prices have grown much faster than the consumer price index. A regional comparison shows that Prague has the hughest property prices.,says Jiří Mrázek, director of the CSU Statistics Department: "Prices of appartments in the capital city increased by 135% and house prices by 65% between 2000 and 2015. There was a mismatch between supply and demand, among others. The cheapest apartments are located in the Ústecký region, where the prices grew by 52% in the period. The cheapest family houses, with price increase of 58% in the period, are available in the Vysočina region." (Source: Czech Statistical Office)
It is not only prices of new property that go up. In Prague in Q2 2017, prices of new appartments are 12.7% higher than those of older appartments (compared with Bratislava, Vienna and Berlin, the price difference between the new and old housing is 20%, 30% and 35%, respectively), KPMG Czech Republic's Partner, Head of Construction & Real Estate, Pavel Kliment tells Hospodarske noviny daily.
18th July 2018
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