Recently, real estate prices in Prague have been falling. So much so that by the end of 2022 the average price of older apartments in Prague has returned to the same values as the end of 2021.
This fall in prices is best characterized by a study by the European Housing Service (EHS), which shows that within Prague the average 65 sqm apartment has lost CZK 680,000 of value.
At the start of 2022, an older apartment within Prague cost approximately CZK 123,000 per sqm. By Q4 this approximation has changed to CZK 112,500, practically the same as 2021 prices. A similar situation has also been unfolding in Brno, Ústí nad Labem, Karlovy Vary and Moravia-Silesia wherein prices decreased up to 9 percent.
“It is already clear that the real estate market is on the decline. We are now just trying to predict how long it will be”, said the CEO of EHS, Hendrik Meyer.
He estimates that the drop in prices for older apartments can still be expected in the Q1 of 2023, but that ultimately, stagnation will prevail.
Moreover, he claims that the market will take a breather in the second half of spring and by May we will see a significant turnaround in the situation.
This situation can partially be explained by the drop in people seeking and applying for rental properties. In August, an average of 39 people were applying for a property, while by the end of 2022, this average was down to 16. The EHS claims that the drop in people applying for rental
properties is due to more properties being put up on offer.
“There were not only houses and flats left by Ukrainian refugees returning to their homeland, but also renovated apartments bought just before the tightening of mortgage credit last spring”.
For many, renting out their large flat and moving into a smaller one has become economical. Similarly, apartments that were originally meant for people’s kids, studying, are now being put on the open market.
This is in line with an ongoing trend within the Czech Republic and Prague in particular, where a higher and higher proportion of flats is being rented out. With almost half of all properties in Prague being rental properties.
While the reduction of prices in the Czech Republic may come to the chagrin of those who already own properties, it may come as a delight to those hoping to get on the property ladder.
This is due to Prague being one of the most expensive cities in Europe. Even when compared to its regional neighbours such as Berlin or Warsaw, the average prices of properties in Prague are incredibly high.