Ostrava Property Market Update

Czech Point 101 July 22, 2014 @ 2:49PM

New developments

During 2011 some developers decreased the prices of new flats in some cases even about 50% in comparison with prices in the 2009.

Developers who used their own money to build the flats have more freedom to offer variety of discounts and they benefit from that. Reason is to get their money back as soon as possible in order to build something new.

Another reason for decrease of the prices of already built flats is fact, that developers who have started to build new flats recently, sell them for present market prices. It makes strong pressure on prices of older new flats. Because of crisis in building industry, construction companies are willing to build new flats for much less prices than before which enable developers to make profit with even cheaper prices of new flats.

Ostrava property market from old to new developments

Some developers are selling their property for 50% less than 2009

VAT rate was in Czech Republic changed from 10% to 14% from 1.1.2012. It caused overall increase of prices of new flat about 4%. However some developers still offer discounts, which compensate that difference.

Our prospect is, that pressure made by prices of new developments and offer overwhelming demand will cause further decreasing of prices of new flats. It is possible, that prices of new flats will be even cheaper because of competition of constructions’ companies. Some developers will probably use tax advantages at selling new flats built several years ago and will sell new flats about 10 – 14% less than at the moment.

All of this information is very positive for people who are thinking about investing into the real estate.

Older Flats

In 2011 prices of older flats have been decreased about 10% in Ostrava.

Average price of them is 17.000 CZK/m2.

There is still demand after flats in houses made from bricks located in the center of Ostrava and in districts Moravská Ostrava and Poruba.

Slight fall can yet come, but deep fall is not expected. Prices in 2012 will be affected by willingness of mortgage banks to lend money to buyers. In 2011 were provided about 40% mortgages more than in 2010. With interest rates and prices of flats going down more people think about their own housing.

On the other side, prices of material and services were increased because of change of VAT and reconstruction of older flats is now more expensive than before.

Some older houses have been renovated recently and there are higher monthly expenses for repayments of loans, association of owners took.
Average price of new flats in Ostrava is 30.000 CZK/m2, but it is possible to buy some new flat in nice location even for 22.000 – 23.000 CZK/m2 and monthly expenses for association fees are low.

Considering facts mentioned above it makes sense to invest into the new flat for good price and in good location than into the older ones. Some new flats are being sold for good price, but not in good location. It is obvious, that right location is key point of the investment.

Rental possibilities

In 2011 prices of rents were stable and there in no expectation of their decrease.

Highest prices of rent are in houses made of bricks and best location are the center of Ostrava and Poruba district.

In Frydek-Mistek prices of rent are on their high level mainly because of Hyundai factory.

Interesting fact is, that just around 2% of flats for rent on the market in Ostrava are in new development. This fact supports idea to invest into the new flats because there is no high competition in this segment of market and new flats offer higher quality of life to their tenants.

Updated/Aktualizováno: ,

1 Comment

  1. nelsonlevi

    Nice focused online property investment information. In India, housing market is headed in the right direction.


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