ogsinvest
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In the conditions of global economic crisis the majority of goods and services become cheaper, and first of all this affects the real estate market.
Despite the fact that the Czech real estate is still stable and the demand is not falling, some types of residential and commercial realty exhibits a tendency to knock off the level of the last year, slowly but steadily. In order to avoid the complete prices collapse, the bankers began to raise the interest rates on mortgage loans. Apparently, this phenomenon is not the temporary one, and the interest rates will continue to grow throughout 2009.
The trend is natural, but the biggest trouble awaits those who have already acquired the housing mortgage in 2006. They have just flown out a term of the interest rates fixed. Three years ago, the interest rates were significantly below the current ones and this prospect is unlikely to please the borrowers which will have to accept the fact that their costs for disbursement of loan could increase by 50-80%.
Concerning prices, the collapse is not to be expected, because the real estate market in the Czech Republic is still fairly stable. But still the uneven decline in prices will take place. There are different factors to affect the prices, such as quality of the housing, location, area prestigiousness, communications availability, and so on. The most pessimistic forecasts concern the panel realty, the price for it may fall up to 25% while prices for prestigious homes in the center of Prague and other major cities will fall up to 4-5% or even less. In fact, the value of real estate will reach the level of 2006 and it is expected that the inflation will stop at this point until 2010.
To ensure the secondary real estate market the Czech Government plans to eliminate the tax for the real estate selling, but with the new buildings no changes are foreseen.
21.03.2009
Despite the fact that the Czech real estate is still stable and the demand is not falling, some types of residential and commercial realty exhibits a tendency to knock off the level of the last year, slowly but steadily. In order to avoid the complete prices collapse, the bankers began to raise the interest rates on mortgage loans. Apparently, this phenomenon is not the temporary one, and the interest rates will continue to grow throughout 2009.
The trend is natural, but the biggest trouble awaits those who have already acquired the housing mortgage in 2006. They have just flown out a term of the interest rates fixed. Three years ago, the interest rates were significantly below the current ones and this prospect is unlikely to please the borrowers which will have to accept the fact that their costs for disbursement of loan could increase by 50-80%.
Concerning prices, the collapse is not to be expected, because the real estate market in the Czech Republic is still fairly stable. But still the uneven decline in prices will take place. There are different factors to affect the prices, such as quality of the housing, location, area prestigiousness, communications availability, and so on. The most pessimistic forecasts concern the panel realty, the price for it may fall up to 25% while prices for prestigious homes in the center of Prague and other major cities will fall up to 4-5% or even less. In fact, the value of real estate will reach the level of 2006 and it is expected that the inflation will stop at this point until 2010.
To ensure the secondary real estate market the Czech Government plans to eliminate the tax for the real estate selling, but with the new buildings no changes are foreseen.
21.03.2009