International Property News

Housing prices fall 5.5% in Q2

20th July 2009

Czech home prices decreased by 5.5 percent in Q2 compared with the previous quarter, which was the second fall in a row, the Czech Statistical Office (CSU) said Monday.

Home prices in Prague fell by 4.5 percent and in other regions in the Czech Republic they declined by up to 6.3 percent, statisticians said.

Compared with the 2005 average, home prices in the country are 55.7 percent higher on average, with Prague reporting a growth of 45.2 percent and other Czech regions registering an increase of 66.2 percent, the CSU data have shown.

The drop in home prices in Q2 is bigger than in the first three months of the year, the Office said.

Some real estate agents, however, start reporting the opposite trend.

According to a study whose results were published by the real estate company Lexxus last week, home prices are falling at a slower place.

The prices are currently at the level seen in January 2008, which represents a slump of around 7 percent, said Lexxus.

Commenting on the results, Ondrej Novotny, an analyst at King Sturge consultants, told CTK that the market has not seen and will not see an across-the-board drop in homes prices.

Older properties and less attractive locations register the biggest decrease, while a slight drop can be foreseen for good quality properties in attractive locations.

A big fall can be predicted for homes that are sold by developers in the first place with the aim to get a bank loan or that are the last to be sold so that the developer could pay liabilities and close the project, said Novotny.

Source: Prague Monitor