Home prices to keep rising in Czech Republic, says market expert
Recent press reports revealed that home prices have risen considerably here in the Czech Republic in the last year, with increases of over 10 percent in some sections of the market. Why are flat prices going up so much - and how does the future look? I discussed those issues and more with Arnost Hejduk of real estate marketing company Rooney and Bennett.
"It's simply because of demand, supported by economic growth. People are more able to afford that investment."
Are foreign buyers, foreign investors also influencing the increase in the price of flats here?
"Not fully. I think the situation slightly changed, comparing the last few years. Because - especially in the luxury segment - you could feel in the past the majority of foreign investors and the expatriate community...But if you look into the numbers and statistics regarding luxury products on the current market you can see how significant the group of original Czech buyers is."
How do you see the future? Do you see prices continuing to go up, say in the next couple of years?
"I would say definitely yes. If you believe in the future of the economy of this country, if you believe in the future of growth in Europe generally, you have to consider that the prices on the real estate market will not be equal - comparing Prague to London, definitely - but they are coming to be comparative."
This year the government started deregulating rents, and it will take five or six years until the rent market is completely free, so to speak. Is that process having an impact on property prices?
"I hope so. Thank God, finally deregulation came true, because I think it was something which was not fair to the market. It's moving very slowly but you can feel movement. A commercial lease is becoming comparative to deregulative rent. In the end, people might decide, why should I pay such high rent instead of paying a mortgage on my own flat? Which is also a decisive factor regarding the higher number of sales of new homes."