‘No end in sight’ for inflation in the Czech housing market
Czech real estate prices thus rose at the fourth highest rate in the European Union in the first quarter, just as they had done in the previous period, according to data just released by the statistical agency. European Eurostat.
ČSOB bank chief analyst Petr Dufek told the Czech News Agency that there was no end in sight for inflation in the Czech real estate market, claiming that there was price growth is unlikely to remain subdued.
Mr Dufek said neither the pandemic nor the associated economic downturn had any impact on the upward trend in house prices in the domestic market.
The fastest EU-wide price growth in the first quarter was seen in Luxembourg, where it reached 17%. Denmark followed with 15.3 percent, ahead of Lithuania, which was just ahead of the Czech Republic at 12 percent.
Compared to other EU countries, real estate prices rose fastest in the Czech Republic from the last quarter of 2016 to the end of the third quarter of 2017.
The highest growth was recorded in the second quarter of 2017, when the average cost of apartments and houses in the Czech Republic increased by 13.3% year-on-year. This growth was more than three times the average growth of the EU at the time.
Even if house prices in the Czech Republic were to stagnate for the rest of the year, they would still be on average 8.4% higher than last year, said Petr Dufek of ČSOB.
On average, apartments in the Czech Republic are now 67% more expensive than in 2015. This growth rate was only exceeded in the European Union by Hungary and Luxembourg, said Dufek.
According to Lukáš Kovanda, analyst at Trinity Bank, real estate demand in the Czech Republic is still strong due to the economic prosperity felt between 2014 and 2019.
During this period, the purchasing power of the Czech population has increased significantly, and Prague in particular has become even more connected to the global real estate market, Kovanda said.
The growth of real estate prices in the Czech Republic shows a long-term growth trend which, in addition to a relatively low supply, is mainly due to the ongoing process of macroeconomic convergence of the Czech Republic with the wealthier states of the European Union, said the representative of Trinity Bank said, adding that the process should continue.