In many Western Countries there is a publicly or, at least, paid access to a database of real estate transactions. This is advantageous for a number of reasons and assists a number of institutes. Some of the beneficiaries include:
1. Home sellers or buyers: It allows them to accurately price their home for sale or see trends in sale prices.
2. Real estate agents: It helps them to be an authority and accurately estimate pricing for sellers.
It is estimated only 40% of residential real estate transactions are handled by real estate agents in Czech Republic.
3. Banks: It is easy to see if there are areas where prices are moving downwards or upwards which helps banks to fine-tune lending and prepare their business offers in accordance to this.
4. Governments: It assists housing departments to get a handle on the real cost of housing for their citizens and where there are needs.
5. Courts: In the case of settlements where real estate is involved, it is possible to accurately and transparently calculate the value of a property in question.
However, in Czech Republic, there exists no such database.
An interesting recent article gave some reasons why this does not exist:
1. It would be against the current Civil Code and law on protection of private data to force property sellers to register the sale price of their property.
2. According to Skalický, president of the Czech Chamber of Real Estate Agencies (ČKRK), only 40% of residential Czech real estate transactions happen through a real estate agent. Thus for the database to be accurate it could not just include transactions through agencies. (For more information on why so many transactions happen outside the real estate industry please see our previous article: Are Czech Republic real estate agents accredited?)
It seems apparent that the benefits of having such a database would be a huge benefit to all industries and individuals whose lives are affected by the price of real estate. In most countries, this is a vast majority of the citizens in the country.
Updated/Aktualizováno: December 8, 2014,
Good article Nathan. I agree 100% on the reasons why there should be a data base. It could be private – accessed only by lenders, notaries and government agencies, for example. I don’t think agents should be given cart blanc access however because anyone could claim to be an agent and get access to otherwise private information. It could be a pay as you access service however. That might limit nosy neighbors.
I think another reason why it does not exist is because of deals done under the table to try to avoid paying the 3% transfer fee. On the “official” agreement, which gets recorded the price is shown as lower that what might be otherwise considered market. Cash however trades under the table. Deals like this skew the numbers. Moreover, there are still many s.r.o. share sales where the company is sold and the single asset of the company, a house, goes with it. That’s never recorded in the register.
Hi John, Good points. I think the transaction information is limited in Canada to registered real estate agents and other institutions and there is a hefty fee to access. This would probably limit a majority of privacy concerns.
Regarding deals done under the table and ownership by corporations, it is true but I think these exist in other countries also and would hope that the number of them are small compared to the overall number of transactions so the effect should be small.