Czech mortgage market enjoys marked growth

The Czech mortgage market expanded by no less than 38 percent in 2020, according to estimates published by the ČSOB bank group. Banks provided around CZK 250 billion in mortgage loans last year, which was a new record.

ČSOB expects that this strong interest in housing loans will continue into 2021 – though it also says there is likely to be a 10-percent falloff in comparison with last year’s figures.

The ČSOB group, to which the specialised ČMSS housing loans company and Hypoteční banka also belong, is the market leader in this field in the Czech Republic.

ČSOB board member Jan Sadil told journalists on Thursday that the record growth was on the back of continued interest on the part of Czechs in purchasing their own homes as well as very low interest rates, which have been falling practically constantly since April.

Jiří Feix of Hypoteční banka said that people regarded property investments as a safe port in a time of turbulence.

His colleague Vlastimil Nigrin pointed out that 2020 was not a record year in terms of number of new mortgages loans signed; the period from 2016 to 2018 still holds the record in that regard.

However, last year property prices shot up by around 10 percent – and that led to a related rise in the average size of mortgages. The average amount loaned by ČSOB in 2020 was CZK 2.9 million, up from the CZK 2.6 million seen the previous year. What’s more it is likely to grow yet again this year.

Mr. Feix said that prices were unlikely to rise across the board in 2021, with Hypoteční banka expecting a stabilisation of prices.

This will not affect all properties on the market but the trend of rising prices should slow this year, he added.