AmCham 2020 General Assembly: Debating the key questions facing your business and the Czech economy - Residential Real Estate
As part of our general assembly series of key issues of the pandemic, the Real Estate Council discussed what is happening in the residential market.
On November 5, the AmCham Real Estate Council held an online brief on the Czech residential market. At the session, Bert Hesselink of CTP Invest presented results of the online survey on the state of the Czech market filled-in by real estate professionals. Michal Skořepa of Česká spořitelna outlined the economic impacts, government steps, consumer sentiment and differences between the first wave of the Covid-19 pandemic in spring and the second wave in the autumn. He confirmed the good health of the Czech banking system.
Blanka Vačková of JLL provided international prices comparison and confirmed a positive population growth and demographic trend meaning solid demand for residential housing in the future. Petr Hána of Deloitte provided data on available dwellings nation-wide and in the regions, including price level. „I will either live in a city or commute there“ is still a persistent opinion.
Lenka Preslová of PASSERINVEST GROUP presented the developers‘ point of view, listing construction price and complexity of the permitting process among challenges – as well as potential areas for improvement, including the new Building Act, clear Master Plan and cooperation between cities and developers. Jan Adámek of JAN Hospitality outlined trends and experience with residential second-hand market.
"I still don´t know whether now is a good time to buy residential real estate but at least I have a lot more intelligence on the topic after today´s very insightful session. Well-prepared presentations were full of know-how, very useful and interesting information!"
According to AmCham online survey on the state of the Czech market:
- Majority of respondents said the market in Prague is overpriced, a bubble. The more we move into the regions, the prices respond to normal, for some they are even undervalued.
- Majority believe the prices will rise, especially in Prague, including apartment rents. Mortgage interest rates will continue to decrease.
- Majority said the market is undersupplied in Prague.
- Majority would hold on with residential investment and for some it is now a good time to sell in Prague.
- Over 25% of respondents are considering change the housing situation that they are in.
Michal Skořepa, Česká spořitelna
“The Czech banking sector is very healthy and can play the supportive role.”
The Czech economy is entering the second wave of the pandemic and there are some differences compared to the first wave. The Government seems to be little more hesitant to provide support, but the channels are already there and - if the government wants to help - the help seems to be coming much faster than in spring.
Blanka Vačková, JLL
“Population growth and the demographic trend are positive so the demand for residential housing will remain strong in the long run. In terms of prices which are already not affordable for a part of the population, we believe, some people may change their housing strategy and may turn to the rental market.”
“In CEE, Prague is the most expensive city, but compared with other Western European cities, Prague is the most affordable.”
Petr Hána, Deloitte
“In total, more than 10,000 apartments in development projects are right now on the market and the total volume of the market is over CZK 64bn.”
“After lockdown in half of March, rents in Prague started to fall down comparing to 2019 and now we are at a lower level than in 2019."
Lenka Preslová, PASSERINVEST GROUP
Challenges that we face are construction prices and complexity of the permitting process. Potential for improvements is in the new Building Act, Masterplan and cooperation between cities and developers.
“We would like to see us more as partners than as rivals.”
Jan Adámek, JAN Hospitality
“We are facing a slower demand. People think more, they are active in bidding, trying to get a discount.”
Full content is available for members. Contact Nelly Tomčíková at ntomcikova@amcham.cz.
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