Year-on-year growth in house and apartment prices in the Czech Republic accelerated to 8.4 percent in the third quarter of last year, while prices rose by 7.8 percent a quarter earlier. Among the countries of the European Union, growth was the fifth highest, at the end of June it was sixth. Compared to the second quarter, prices increased by 2.6 percent. That’s according to data released by Eurostat on Thursday. In the EU, prices rose by an average of 5.2 percent year on year.
“People who thought that real estate prices would fall during the coronavirus pandemic were deeply mistaken. We are witnessing a sharp rise in house and apartment prices due to the pumping of new money into the economy through the loose monetary policy of central banks and the wasteful policy of governments.” “said Štěpán Křeček, an analyst at BH Securities. According to him, this trend will continue. He added that real estate will be a popular investment alternative, especially in countries such as the Czech Republic, where the capital market is not very developed. “Therefore, it can be expected that more and more money will go to the real estate market, which due to the limited supply will push up price growth,” Křeček added.
Prices of houses and flats rose the most in Luxembourg, by 13.6 percent. It was followed by Poland (by 10.9 percent), Austria (by 8.9 percent) and Slovakia (by 8.5 percent). In contrast, in Cyprus prices fell by 1.4 percent, in Ireland by 0.8 percent. Data for Greece are not available for a long time.
“In the European Union as a whole, real estate prices rose more sharply year-on-year in 2020, at a rate exceeding 5%. Growth fell below 5% in 2019. So people in most EU countries still see real estate as a suitable way to save money and protect it from inflation. , “said Trinity Bank analyst Lukáš Kovanda.
Compared to other EU countries, real estate prices in the Czech Republic grew the fastest continuously from the last quarter of 2016 to the end of the third quarter of 2017. The highest growth was in the second quarter of 2017, when houses and flats in the Czech Republic rose by 13.3 percent year on year. Compared to the EU average, growth was more than three times higher at that time.
“We will probably not see a significant cooling in the real estate market this year either. Given the limited construction, which is also confirmed by building permit statistics, developers are unlikely to flood the market with new offers. Due to relatively stable living standards and the prospect of increased household incomes due to The abolition of the super-gross wage is not likely even a shock on the demand side, “added ČSOB analyst Petr Dufek.
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