Trend Report 2019 - Czech real estate market survey
Published by Association for Real Estate Market Development (AREMD)
The Association for Real Estate Market Development is a non-profit interest association. In 2019 the ARTN member base has 110 members, including 18 corporations in addition to personalities in various real estate market segments. AREMD's Trend Report has been published since 2002 as a regular expert study of developments in the real estate market in the Czech Republic.
When asked about key trends for 2019–2020, respondents generally mentioned a slowdown in the Czech economy, a price growth cooldown and overall market adjustment following the peak of the cycle.
The development of rental housing is often cited in connection with the lack of apartments for sale, especially in Prague, the development of digitization, the constant demand for office space despite rent growth and stability in the investment market.
Real estate prices increased by about 6-10% per annum in 2018; but the growth has slowed down, and in some regions, a slight decline was observed. Prices of tower block apartments on the outskirts of cities and the prices of new flats grew the most, especially those of the highest quality.
Apartment prices are expected to cool down, and rents increase slightly. Respondents criticised rental housing "due to excessive protection of tenants, which, together with the lack of legislation, strict conditions for bank financing of developers and often problematic functioning of HOAs, distorts this segment."
Apartment prices in Prague increased by a record 38.4% compared to last year. "The city does not have a sufficient number of municipal apartments to effectively enforce rent control. More than 8,000 new apartments would need to be built every year to meet the demand that dramatically exceeds the supply and affects real estate prices. Realistically, however, not even half of this amount is built due to complicated approval processes."
The high prices on Prague's real estate market mean that many young people who cannot afford to live in the metropolis migrate to the outskirts of Prague - but these new settlements lack amenities and their everyday transfer to Prague for work or education causes congestion.
Keywords: EU, Europe, Czech Republic, Czechia, Prague, real estate, financialisation, financialization, real estate, tenants, tourists