Brno – The six-month fall in home prices is over. Data from some real estate agencies and property portals show that prices of flats and houses are slowly starting to grow again. All of them agree that waiting for yet a better price is pointless.
“For a few months now we have been registering a slow increase in flat prices in Brno, and Prague has joined it in the past two months. These cities generally serve as indicators of future development. We expect prices will gradually start rising in other regions, too,” said Michal Pich of EuroNet Media, which runs the real estate portals realitycechy.cz and realitymorava.cz.
Others confirm the change. “We have recorded a moderate increase in property prices. It comes in reaction to the more positive economic sentiment,” Re/Max spokeswoman Barbora Hokrová said.
Best prices are over
Prices are only increasing by tenths of a percent each month, but it is still an important turnaround for real estate brokers.
“We can see the trend clearly. Those who wanted to make money on the purchase of property bought in April or May. The best time is over. Now it will depend a lot on how banks react, whether they provide people with better access to mortgage loans,” said Miroslav Jonáš, sales director at M&M reality holding.
It is still possible to buy properties at favourable prices, however, especially thanks to the rising number of foreclosures, he added.
Property owners no longer want to reduce prices of houses and flats if they do not have to. “Many sellers are no longer willing to cut their prices, so they rent out their flats, if circumstances allow,” said Michal Pitucha, executive director at real estate agency Sting. Such owners will attempt to sell their property again only after prices start to grow, he said.
And experts think such a time will come. “For the rest of 2009 we do not expect any dramatic changes in prices. The only thing that could perhaps set the market in motion is better access to mortgages, but that is unlikely to happen,” said Pich.
But the market will gradually wake up even if mortgage rates do not change. “I expect that in two years or three years at the latest, property prices will be higher than they were last summer,” Jonáš said.
Prices of homes in attractive locations will start growing first and fastest. These homes experienced the lowest price decline in connection with the economic crisis. On the other hand, prices of lower-quality housing fell more significantly and will remain lower for a longer time.
