Secondary resi prices falling faster than expected

Robert McLean

#cee, #proptech, #development a #architecture

Prices of flats in the Czech Republic peaked on a quarterly basis at CZK 79,000 per square meter at the beginning of Q2 2022 – and they’ve been falling ever since. As of Q4, they’d dropped 19% to CZK 64,000 / sqm. The numbers are those of Iztok Toplak, whose raw data comes from reservation contracts for existing apartments concluded nationwide through his real estate agency RE/MAX G8.

Neighborhoods in Prague’s wider center are not immune from the trend. “The highest median price per square meter was CZK 144,000 in the second quarter,” says Toplak. “In the 4th quarter, the median price was CZK 128,000. That’s an 11% decline over the past six months.” The figures are for brick buildings, as opposed to panel buildings and apply to neighborhoods like Podolí, Smíchov, Dejvice, Holešovice, Karlín, Žižkov, Vinohrady, and Nové Město.

Citywide, monthly figures make for even more dramatic viewing. The average price for deals signed in February was CZK 127,000. By December, they’d plummeted 23% to just CZK 97,000 per sqm. Nationwide, monthly prices peaked in June at CZK 82,000 before falling to just CZK 61,000 per square meter in December.

To be clear, the decline in prices has only begun. Three months ago, Toplak told ThePrime he expected Prague prices to fall until 2025 to CZK 90,000 and nationwide to the low CZK 50,000s. “This prediction is already being fulfilled and I’m afraid that the speed of the decline in prices will be even faster.”

While they don’t reflect final sale prices, Toplak says indicators based on reservation contracts are of great predictive value. That’s primarily because most contracts are concluded as signed. Statistics based upon completed deals that have been recorded in the land registry are likely to be very similar – but they won’t be published until months from now.

 

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