An analysis, put together by IRI regional information institute for Hospodářské noviny shows that the flat prices in the Czech Republic are likely to undergo a record fall this year – in accordance with the entire economy. IRI is the only company systematically and continuously monitoring the flat prices in the country.
“Market prices have been falling for the past six months. They fell by an average of 7% from the absolute top they reached last November. The fall accelerated in the last three months,” said Milada Kadlecová, IRI head.
The survey is based on the prices of older, average-size flats. These prices grew by 18% last year and doubled since 2000.
This year, however, should see a drop of 15%-20% on average. In Ostrava, for example, where the prices grew rapidly in the past years thanks to the industrial revival, they might plummet sharply due to the problems in mines and metalworks.
“Prague represents a separate category, since the prices reached unexpected heights. It is possible that many investments will not fulfil the expectations from the long-term perspective,” Kadlecová said.
Flat prices are falling due to a number of reasons. People are afraid of big debts and so they rely on prices falling further. Developers are launching special discounts for new flats and owners of older flats also need to lower their expectations.
“The discounts have not started yet. Those who want to buy with profit should wait some more. They need to watch carefully to see when the economy touches the bottom. That is when the prices will start rising and investments evaluating,” said Arnošt Hejduk, head of Rooney & Bennett.
