Welcome to a beautiful new world. No, I’m not suggesting that this summer we’ll be experiencing the dystopian society that Aldous Huxley masterfully depicted in his book written nearly a century ago. I’m only adapting the title of his most famous work to describe the current state of the real estate market, which, after months of stagnation, is coming to life again.
Here at Svoboda & Williams, we’re witnessing a higher demand both for new build as well as for quality resale properties. The majority of investors who have been waiting for a significant drop in prices have found that this is unlikely to happen in the premium real estate segment. It may, however, occur for individual resale properties in situations when an owner is forced to sell at a discount due to personal reasons.
Investors with financial savings in particular are therefore no longer playing the waiting game, while clients with mortgage loans are adapting to a new reality—though inflation is going down, the lower interest rates of the recent boom era are unlikely to return for some time. Plus, once interest rates start falling again, banks are likely to be more accommodating to clients with good credit ratings who want to refinance their loans. The Czech National Bank’s July decision to relax mortgage rules will also give the mortgage market a much-needed boost.
What’s the driving force behind the slowly thawing real estate market, you ask? In short, quality! The oversized opulent villas of the 1990s with astounding built-up areas yet badly designed and poorly built are the unsellable real estate trash of today. Buyers are now interested in modestly sized properties that boast exceptional materials, energy ratings, and environmentally friendly facilities. This means that the temporary downturn of the real estate market has made us more aware of true quality that is able to withstand crises. This is great news, and not just for buyers.