This information-packed brochure from the consultancy firm, which together with PwC, KPMG and E&Y belongs to the so-called Big Four, offers a fascinating look behind the scenes of Czech development as well as a comparison with other countries and cities across the Old Continent. We have picked out the key points you definitely need to know if you are considering buying or renting a property.
The gap keeps widening
On the positive side, the average mortgage rate on new loans fell last year from 5.81% to 5.07%, and the number of new loans rose by more than a third year on year. That, however, is where the good news for prospective homeowners ends. Above all, the data confirm the trend of a steadily widening gap between stagnating salaries and ever more expensive flats. It would be naive to think you can simply save your way to your own home these days. Just last year, a typical Prague flat (under its unified methodology, the company refers to a property with two living rooms and 70 square metres) required 13.7 annual salaries, this year it is already 15. In all of Europe, only residents of Amsterdam and Athens need more.
Amsterdam, Athens and Prague – the imaginary winners’ podium most cities would rather avoid
In Brno, meanwhile, the pace of price growth was even higher. One unusual finding came from Ostrava – developers’ asking prices there barely moved year on year, yet figures from actually completed transactions point to almost 12% price growth. Does this mean sales catalogues are failing to keep pace with the dynamics of the local market?
Young buyers cannot manage without family help
“Slow wage growth and faster inflation in property prices are gradually deepening inequalities. This structural imbalance is leading to longer-term concerns about housing affordability and market sustainability. This is particularly true for people buying their first property and for households on average incomes,” Deloitte writes in its report.
These days parents, grandparents and even siblings act as mutual guarantors for mortgage loans
Young people in particular therefore very often have to rely on help from their loved ones and a strong family background. This can take the form of loans, the gradual transfer of an inheritance, and also guarantees for mortgage loans. “Shared mortgages” are among the current trends and a way to secure better terms and lower monthly instalments. Built-to-rent: Just hand over the keys Analysts at Deloitte also note the gradual institutionalisation of the rental housing market. The rent per square metre of residential property in Prague stands at roughly 425 Kč, but for so-called BTR (built-to-rent) properties ready for immediate, hassle-free move-in it can be up to a third higher. For investors this represents an opportunity, albeit one limited by the volume of demand, typically from wealthier international clients. Would you like a stable partner to track the ups and downs of the property market for you and make sure every one of your investment properties delivers a stable, top-of-the-market return? Then do not hesitate to get in touch and request a no-obligation rent calculation as part of the FLAT SERVICE Partner and Garant services. Call us on +420 277 000 330 or email sales@flatservice.cz and look forward to enjoying next Christmas without a single worry about tenants!
