Visegrad Insight/FT: Czech central bank acts to cool buoyant property market
Tomas Danek did not plan to buy a flat for another couple of years. But as the 31-year-old network engineer watched Prague’s property prices surging higher and higher, he felt he had to take the plunge, Financial Times writes.
“There is enormous pressure to buy as soon as you can because the rate at which prices are growing is insane. In the last year, it was 20 per cent in some neighbourhoods,” he says. “If the prices grow another 30 or 50 per cent it will be unreachable for me.”
Since the end of 2015, the price of flats has risen by 25 per cent, according to data from the central bank. In the second quarter, house prices were up 13.3 per cent year-on-year — making the Czech Republic’s housing market the fastest growing in the EU, according to Eurostat.
On Monday, the Czech National Bank made a fresh attempt to have banks prepare for possible tougher times ahead, raising their counter-cyclical capital requirements for the third time since 2015.