Endless months when the real estate market resembled a sleeping Snow White are behind us. In order to provide our clients with the most up-to-date services, exactly a year ago we decided to write and publish Svoboda & Williams’ Market Report on a quarterly basis, i.e. four times a year.
We supplement the data on our sales transactions with data on completed sales corresponding to our monitored sample from the Cadastre of Real Estate and only track actual achieved sales values, not offered prices. To calculate the price per sq. m., the selected methodology then takes into account the ratio of the exterior to the interior areas, the condition of the property, the quality of the facilities, and subtracts the price for parking from the achieved sales price. No other available analytical tool goes into such detail, not to mention that many don’t even work with source data. I would venture to say that, for the monitored sample, we offer the most detailed analysis available on the local market.
What does the current data have to say about Snow White? It’s assuring us that the sleeping beauty is finally waking up after several months of slumber!
Inquiries for properties, which began to go up at the beginning of the summer, continue to rise. The wake-up call, or, if you like, the prince’s kiss, wasn’t so much the symbolic affordability of mortgages, but rather the signals that central bankers have sent out in recent months. The mortgage market in the Czech Republic had a half-yearly growth of 42.6 percent. Svoboda & Williams also recorded clients’ increased interest in financing the purchase of real estate with loans, 10 percent more than half a year ago.
We must also come to terms with the fact that recent events are changing the real estate market for the foreseeable future. The multi-year real estate party, fueled by, among other things, the extreme fiscal reaction of central bankers to global geopolitical events, has now come to an end. However, an investor who is adding this particular asset to his or her portfolio is thinking in the long-term. And this future is where growth awaits!
This was also the consensus of 1,400 experts from 133 countries surveyed by the German Ifo Institute and the Swiss Economic Institute. They expect property prices to soar in the coming decade. In Eastern Europe, prices could rise by over 15 percent each year. This may be a fairytale, but given the high costs of construction, which the market hasn’t fully absorbed, or the reduced stock and development of properties, I think it’s more than likely that these optimistic predictions will come true.
