Czech sale prices for flats down 20%, says Toplak

Published: 04. 01. 2024
Real estate really does protect you against inflation…except when it doesn’t. Fun fact: over the last two years, Czech residential prices have actually fallen by 20%. That’s if you take inflation into account when examining the prices in sales contracts. Think about it: prices on just about everything have been skyrocketing for the past 24 months, but residential prices are stuck (at best) or falling (by 6% on average). What does that say about property as a hedge against inflation?
The numbers come from real estate broker Iztok Toplak, who systematically monitors the prices in sales contracts negotiated by his agency Re/Max G8. He says that high interest rates last year slowed the pace of sales, turning it into a buyer’s market. An overall lack of supply prevented a more serious drop in prices. “This was a 20% decline in real values over the last years. Expressed in nominal terms, they fell by about 6%…Over the last ten years, residential prices rose 85% in real terms, while wages rose 15% and rents less than 10%. Maybe right now is the ideal time to acquire real estate.”
Prices are back to where they were two years ago, says Toplak, having risen nearly 3% between Q3 and Q4 2024. The average flat sold in Prague now has a price of CZK 7.4 million, nearly the same as at the beginning of 2022. “That’s because buyers are choosing larger flats. The average price per sqm fell roughly CZK 25,000 since then,” he says. The average price of flats excluding Prague and Brno is now CZK 49,000 per sqm.
“In my opinion, 2024 probably will not be a year of cheap mortgages and great real estate prices. Prices will be stable or they’ll rise slightly.” But he stresses this is for actual sales, as opposed to the prices we see offered for properties. Especially in a buyer’s market, if you want to know the real price of flats, it’s crucial to focus on sales prices. “Offers only reflect the prices for properties that haven’t been sold yet.”

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