Iztok Toplak: Residential prices are falling

Robert McLean

#cee, #proptech, #development a #architecture

Czech residential prices never fall, goes the saying. At least not in Prague.

Not so fast, says Iztok Toplak. He argues that’s exactly what’s happening in the last quarter of 2022: overall by 7% (q-o-q) in Prague and by 9% outside the capital.

To be clear, he’s talking about the prices at which reservation contracts were signed at the agency RE/MAX G8, the agency he works at. As he freely admits, those deals haven’t been recorded in the land registry yet, so there’s some small percentage that won’t turn out to be relevant to the data. But he’s been compiling this data set for quite a while in the same way, which is why I find it interesting.

What he thinks it’s useful for is predicting the prices of sales that are now being recorded in the land registry. Why wait around for the official figures to come out when you can infer them? It’s also why in his charts (these came out Nov. 3) he lists the latest data as Q4 2022. I asked Toplak about the volume of sales. He doesn’t have those exact numbers yet, but says they started falling steeply during Q3. In other words, rising interest rates were the nail in the residential boom’s coffin. You can find his entire report here.

His prognosis for the rest of this decade is also sobering, as it calls for the average price of existing flats in Prague to fall from CZK 120,000 per square meter all the way to CZK 90,000. Toplak says they won’t turn around again until mortgage rates fall to far more reasonable levels, something he’s predicting might take until 2025.





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