Real estate experts estimate that the price of apartments in the Czech Republic will rise by 10% by the end of 2017

If the economy of the Czech Republic maintains its positive trend, the Czech Republic real estate market is projected to grow by 10% until the end of 2017 and by a further 7.5% in 2018. These findings are the result of a study performed by the Real Estate Market Development Association. This study included some 70 leading experts in the field of real estate in the Czech Republic. The experts wrote in the report that changes in the law have an impact on residential loans. The toughening conditions for approving mortgages promulgated by the Czech Republic Central Bank have a moderating effect on the rate of the real estate price rise.

Nonetheless, the prices of apartments in the Czech Republic are rising sharply, particularly in the cities of Prague and Brno. In Prague the apartment prices have already exceeded the peak prices of 2008, prior to the economic crisis. For example, new apartments in Prague experienced a double digit rise in 2016 and the average price for square meter is 75,000 Czech Coronas. According to the opinion of a senior analyst in- Cenovamapa, the new apartment prices serve as a gauge for the market situation. They are first to rise when the market is expanding and first to decline when the market shrinks.

The primary reason for the projected price rises is the low interest rates on the mortgages that resulted in a rise in demand. A report by the Real Estate Market Development Association that was recently published was written by experts in the central bank of the Czech Republic. In fact, the projections regarding the rise of real estate prices (10% in- 2017 and- 7.5% in 2018) are based on the projections of these experts.

Another reason for the rise in real estate prices is the population growth in Prague. According to the demographic projections, the population of Prague is projected to grow by an additional 93,000 people by 2030 and 82,400 new apartments will be required. To meet this demand it was necessary to complete the construction of 5,500 apartments this year. In practice, however, only the construction of 4,300 was completed over the past few years.

Nonetheless, outside of Prague the situation is completely different and prices remain 2% below their peak level in 2008.

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