Growth of House Prices in the Czech Republic Continues at a More Moderate Rate
The Czech Republic is no longer the EU country with the fastest growing housing prices, according to the latest data from Eurostat. Slovenia tops the list, while the Czech Republic falls to 7th. Photo credit: Pixabay.
Prepared by Berk Büyükbalcı
House prices continue to rise in the Czech Republic. A 7.5% year-on-year growth in house prices was reported in the second quarter of 2018. However, although prices are still increasing, the Czech Republic is no longer the EU country with the fastest growing house prices, according to the latest data from Eurostat, the EU statistical office.
Slovenia, Ireland, and Portugal are the top three of the list, followed by Hungary, Netherlands, and Latvia. The Czech Republic shares 7th place with Bulgaria.
According to iRozhlas, the continuing rise in house prices in the Czech Republic is mainly due to the complicated and low rate of approvals for new building constructions (“Ceny bytů v Česku už neletí tak rychle vzhůru. Bydlení nejrychleji zdražuje v Irsku a Slovinsku”, October 15, 2018).
Other factors include a huge demand for new housing propelled by growing salaries, interest rates that were until recently relatively low, and the open mortgage policies of many Czech banks. Combined with these, poor approval procedures for new residential developments have created a lack of new apartment buildings, increasing the value of older apartments and leading to ever-increasing house prices.