Old Houses and Flats Only 6% Cheaper Than New Properties by End of 2020

2020 brought with it several major trends. Despite the continuing rise in real estate prices, the Czechs’ desire to invest in real estate did not decrease – especially in smaller apartments and older houses with good public transport connections.

Their number increased by 36% year-on-year, supported by greater availability of rental apartments and declining rental prices. In the largest Prague market, rents returned to the level of 2018 at the end of the year.

Key reasons for this development lies in the greater availability of rental apartments and decreasing rental prices. Rent prices equivalent to prices in 2018.

On another note, sale prices of old houses and flats increased despite the Covid-19 pandemic, with a year-on-year increase of 13%, the average price of a house went up to 37 635 CZK per square meter, while apartments increased to 67 517 CZK per square meter.

Real estate prices increased the most, year-on-year, in the Hradec Králové Region (houses by 31%, flats by 24%), in the Ústí Region (houses by 33%, flats by 18%) and the Plzeň Region (houses by 26%, flats by 16%).

Flats in the capital remain the most expensive, where the average price in 2020 was around 95,196 CZK per square meter, followed by Brno and flats in the South Moravian Region, with an average price of CZK 64,999 per square meter. Flats in the Central Bohemian Region have an average price of CZK 53,102 per square meter.

In both Brno and the Central Bohemian Region, apartment prices increased at an above-average 18% rate year-on-year. In the fourth quarter of 2020, for the first time, Prague’s second-hand apartments fluctuated above 100,000 CZK per square meter.

The price of Prague’s new buildings declared by the developers was just below 108,000 per square meter, and at the end of the year, an older apartment in Prague was only 6% cheaper than a new one.

In Prague and Brno, because of the inflating prices, the total area of ​​real estate sold has fallen again, and people are trying to compensate for the increase in prices with smaller flats. On the contrary, in the Central Bohemian Region, people are more willing to pay extra, but this is also due to the fact that a large part of the demand is from neighboring Prague.

Because of the rising real estate prices, coupled with the instability and uncertainty the pandemic presents, a record number of Czechs have rented out their properties, using favorable prices.

Bezrealitky, which have about a fifth of the share of all rents in the Czech Republic, and a 40% share of all rents in Prague, 47,000 houses and flats were rented last year. The biggest number ever documented through the portal. The largest year-on-year increase in the number of leased properties was recorded in Prague, where even 50% more houses and flats were rented. People in other regions also rented out their properties more – 38% more flats and houses were rented in the Liberec region, for example.

The incline towards rents was supported by the stagnation of rental prices. “How long prices remain at current levels will only depend on the recovery of the tourist market. In Prague, we can expect a jump in prices and a decrease in the number of flats on offer when tourism resumes”, explains Hendrik Meyer. “In Brno, where supply is influenced more by local residents, rental prices will be affected mainly by the overpressure of demand.”

Number of leased properties in the Czech Republic over time:

• Q2 2019: 8765

• Q3 2019: 9009

• Q4 2019: 8487

• Q1 2020: 9343

• Q2 2020: 12839

• Q3 2020: 12107

• Q4 2020: 12760

Advertised flats and houses for rent in most cases, found new owners and tenants within three weeks of the properties’ listings. Smaller flats and houses in suburban areas intended for sale, usually found their new owners within a month, while large flats and houses needed about a month and a half. Within three months, more than 95% of all residential properties on offer were sold.

“Undoubtedly, the ongoing digitization of the real estate market and the growing desire to offer their properties directly also play a role in the rapid pace of properties being bought or rented out.”

Bezrealitky is the largest service offering the possibility of direct sale or rental of real estate, and at the same time they are one of the most visited Czech real estate websites.

The portal is visited by more than half a million people interested in housing every month, and every month around 800 people sell their property successfully on the platform, and around 4,000 properties are rented.

The portal saved people around 2 billion CZK in 2020 on commissions, which they would otherwise have to pay to real estate agencies.