Czech property prices forecast to reverse decline in 2013Czech Republic property prices could take an upturn in 2013 and grow by 2%.
That’s the prediction from Tim Morgan, Director of Emerging Real Estate, which specialises in Czech property, among others.
Mr Morgan believes that a fall in Czech property prices this year will reserve over the next two years.
He tells OPP Connect, “Based on supply and demand we expect over the longer term to see property prices to shift from – 4% (minus 4%) this year to 2% in 2013 and 3% in 2014.
“The rapid growth of Czech wealth will be soon reflected in the real estate market – and the Czech Republic continues to present a minimal risk investment with all the potential growth that this part of Europe still offers.”
The Czech market is supported by the strength of the German economy and close links that have accounted for more than 29% of Czech foreign trade turnover in the last five years.
“Overall the market is very active due to reasons including strong links to Germany and Germany’s strong economy, low unemployment, high education, high productivity of work and low taxes,” says Mr Morgan.
“Our apartments for rent are filled almost immediately and the rental market is very strong with many Czechs renting not only affordable or middle class properties, but also higher end luxury properties. This is attributable to the volume of international companies moving into the Czech Republic and the number of Czech people in management positions.”
In 2011, about 28,000 new residential homes were built, according to Český statistický úřad – the Czech Statistical Office.
“On the basis of supply and demand, developers upped output in 2011, expecting a stronger recovery on the market than was realised. The volume was still substantially lower than the peak years of 2007 and 2008.
Even though net population growth was only about 25,000 from 2010-11) the latest 2011 census highlighted a big increase in separate households because of divorce or young adults choosing to live in their own properties as opposed to living with their families.
Mr Morgan believes the Czech Republic offers potential for overseas investors. “In today’s economy, many prospective investors have looked towards the BRIC nations for strong, reliable growth and blossoming economies, which seem to offer great potential. However, there are exciting and emerging economies much closer to home that are often overlooked, but are increasingly making headlines with savvy investors.”
Eastern Europe offers strong developing markets and over the next 15 years the Czech Republic is expected to experience significantly faster trade growth than the predicted global rate of 98%, according to HSBC’s global investment report.