The prices of apartments are going up again

Prague - New and old apartments are becoming more expensive again. In the first quarter, apartment prices rose in almost all regional cities except Brno and České Budějovice. The fact that there has been a turnaround in the housing market was discovered by the Institute of Regional Information in Brno. According to them, prices have increased by an average of ten percent over the past year. The daily Mladá fronta Dnes reports this.
"Prices are rising along with the overall growth of the Czech economy," the newspaper quotes Milada Kadlecová from the institute. Sellers can afford the price increase. With the economic growth, people are earning more and are willing to pay more, the newspaper states. "The demand for new apartments is also fueled by a great concern over an increase in the value-added tax rate on residential construction in 2008," stated Patria Finance analyst David Marek.
For example, an older apartment in Prague measuring 68 square meters, which cost 1,809,000 crowns last November, would now cost buyers an additional 177,000 crowns.
Until 2004, apartment prices were rising due to expectations that after joining the EU, foreign buyers would come who would be willing to pay higher prices than Czechs. However, this scenario did not materialize, and apartment prices began to fall. "The panic before a sharp rise in real estate prices following our entry into the Union was completely unfounded," the newspaper quotes Martin Lux from the Institute of Sociology of the Academy of Sciences.
In addition to older apartments, the prices of apartments in new buildings are also rising. Construction companies are therefore supplying more and more to the market. In the first quarter of this year, builders completed nearly 7,000 apartments, and more than 9,000 were started. Last year, nearly 33,000 apartments were successfully completed.