Loans for housing are still on the rise, confirmed the Czech Banking Association. Interest in residential properties is not waning.
The domestic real estate market strengthened last year, according to an analysis by the Czech Banking Association and the real estate-analytical portal Flat Zone. Property prices, according to the mentioned sources, rose by 12 and the mortgage market even by 41 percent. This trend is also confirmed by financial and real estate experts.
Together with refinanced loans, the market reached an amount of 406 billion crowns last year. Yes, that's exactly how much people borrowed from banks and other entities to live in their properties or rent them out. The strong revival of interest is also confirmed by an increase in the number of new mortgages by almost a quarter to 76,000. This growth was accompanied by almost a 15% increase in the average mortgage amount to 4.21 million crowns last year.
“In recent months, we have observed a noticeable revival of interest in mortgages. Clients have realized that the era of extremely cheap money will not return anytime soon, and have started to actively address their own housing and investments again. At the same time, we see that fears of further property price increases are accelerating their decision-making. Today, it's not just about the rate, but about the overall financing strategy and long-term stability,”
wrote in this context to the editorial office the co-founder of the consulting company Finotéka.cz Barbora Rolcová.
The total volume of new mortgages in the past year amounted to 321 billion crowns, which is 41 percent more than in the previous twelve months.
Mortgages remain a key source of financing for real estate purchases
The transition from the past year to the new year confirms the claim that market recovery is beginning to hit in some cases against the worsening income-to-price ratio for households.
"The availability of housing in the Czech Republic is hindered by high property prices and the associated mortgage amount, which reached a new average maximum of nearly 4.5 million crowns at the end of last year. This is related to the average monthly installment, which is just under 22,500 crowns. Compared to 2024, it's about 8.6 percent more, thus surpassing last year's increase in the average nominal wage."
stated the chief economist of the Czech Banking Association, Jaromír Šindel, in a press release.
However, mortgages still remain one of the main tools for financing the purchase of their dream property.
“Clients are more cautious today, they calculate and plan more, but if they have a stable income and properly set up financing, they do not postpone their decision on homeownership. For them, a mortgage is a tool of long-term stability, not short-term speculation,”
explains Rolcová.
Sales are still doing well
Interest in buying real estate certainly isn't waning. According to the Czech Banking Association and the real estate analytical portal Flat Zone, their sales increased by 11 percent last year, which meant that 6,500 more apartments and family houses were sold than in the previous year.
Most new apartments found buyers in Prague, the South Moravian Region, and the Central Bohemian Region. In all regions except the capital city, the supply of residential real estate increased.
According to Milan Roček, the managing director of Flat Zone, while faster construction could increase housing availability, it must be concentrated in areas with high demand.
The most older apartments were sold in Prague and the Ústí nad Labem region. Secondhand properties increased in price the most among all types of owner-occupied housing last year, by 18 percent. In the largest domestic agglomerations, namely Prague and Brno, such properties are on average three times more expensive according to the Flat Zone portal than in small towns with fewer than 10,000 inhabitants, and twice as expensive as in medium-sized towns. A similar trend is also typical for family houses. The difference between metropolises and rural areas can reportedly be up to fourfold in such cases.
"Despite the current tensions in the Middle East and increased uncertainty abroad, we see that people are not postponing their life needs. For this year, we expect the volume of new mortgages to grow by approximately 10 to 20 percent compared to last year. Housing is a basic need, and households must address their own roof over their heads and rising living costs regardless of the geopolitical situation. Life does not stop even in times of global uncertainty. And housing is one of the decisions that have long-term significance regardless of what is happening in the world,"
predicts further developments Rolcová from the consultancy company Finotéka.cz.
Sources: original article, own inquiries, Czech Banking Association, Flat Zone
