The CNB’s move this month to control currency rates is the clincher in my mind that the property market will not be going backwards from this point.
Although it will have little actual direct impact on property prices as an interest rate decrease would have (but is really not possible with the current rate at a virtual 0%), I believe it will be a strong catalyst for the economy. It will prompt more FDI in this ‘window’ of currency manipulation, a strengthening of exports and the resulting growth in GDP.
This year 2013 has shown a very strong property market with the amount of mortgages granted in Q1 to Q3 an approximately 30% growth over the same period in 2012. If the growth continues it is predicted to eclipse the record year of 2007.
The HBIndex, a housing price index compiled by the market leader in residential mortgages Hypoteční banka, has confirmed the turn-around with two quarters of growth in the price of flats.
Although the growth is not spectacular it confirms in my mind that the trend of housing prices downward is finished.
There can be no direct cause-and-effect assumed but the recovery continues the pattern that the property market in Czech Republic follows the trends in the US with a delay of 1.5 to 2 years.
As sentiment changes and sellers no longer expect prices to be going downwards in the future we can expect prices to firm even more quickly. It will become harder and harder to negotiate interesting deals.
Great property investment opportunities are available – real Ostrava case study
Did you miss out on the stock markets’ spectacular gains (140% in the US) since lows in 2009? Let’s not do the same with the opportunities right now in front of us in the property market! For motivation read this case study of an investor’s story purchasing a 600,000 CZK flat this year: Ostrava property investment case study.
by Nathan Brown (Google+) - firstname.lastname@example.org - owner and managing director of Czech Point 101 - "You’re in good hands whether buying, selling or managing property in the Czech Republic."