The apartments in the Czech Republic have started to decrease in price

Prague - Apartment prices in the Czech Republic have begun to decline after years of continuous growth. According to today's Hospodářské noviny, average prices for older apartments in Ostrava, Jihlava, and Plzeň fell during the first half of the year. In other larger cities, the rise in apartment prices slowed significantly. For example, in Brno, the increase dropped from fifteen to half a percent, the newspaper reports, citing a survey by the Institute of Regional Information, which has long been monitoring price trends.
    "Now I advise interested parties in apartments to wait a while. I believe they cannot be at a loss," said Milada Kadlecová, director of the institute, to HN.
    In Prague, where a medium-sized apartment in the city center typically costs over three million, prices still rose by five percent in the first half of the year. However, even here, the growth stopped in the summer. "For the past two months, the price of a standard older apartment in Prague measuring 68 meters in a regular, not peripheral, location has remained at May levels," HN quotes Kadlecová. The developments in Prague, where the market is the largest, according to her, usually repeat in the rest of the country.
    The fact that last year's fever has faded is also noted by real estate agents, according to HN. "Prices in Prague are definitely not rising. Both for older apartments and for new builds. The main cause of stagnation is an oversupply; many new apartments are being built," said Jan Borůvka from the Association of Real Estate Agencies to the newspaper. According to the director of the agency AAAbyty.cz, Petr Illetšek, the slowdown is most visible in housing estates and areas with poor transport accessibility.
    The cooling in the apartment market is also reflected in the fact that demand for mortgages is twenty percent lower than last year. According to Central Group, one of the largest companies in the new apartment market, the number of clients has decreased by about the same amount.
    Decreased interest in apartments may be one of the signs of economic slowdown. A significant role has been played by the increase in value-added tax on new apartments this January, which significantly boosted demand last year. Banks, due to fears from the American mortgage crisis, have tightened conditions and simultaneously raised interest rates for new applicants, writes today's Hospodářské noviny.