Construction lacks workers, rising prices may lead to a decrease in interest in real estate

Publisher
ČTK
07.01.2022 19:50
Czech Republic

Prague

Prague – The problem of the Czech construction industry remains a shortage of labor. Rising input costs are also increasing the costs of building constructions, which may lead to a decline in interest in purchasing real estate. This follows from statements by analysts contacted by ČTK today. According to data published today by the Czech Statistical Office (ČSÚ), construction production in the Czech Republic slowed its year-on-year growth to two percent in November last year from October's 3.7 percent.


According to the chief economist of BHS Štěpán Křeček, it is necessary to employ foreign workers in construction. "In the future, it is appropriate to support the issuance of work visas for people from culturally related countries, which would only be extended in case of employer satisfaction," Křeček said.

The chief economist of UniCredit Bank Pavel Sobíšek pointed out that the current contradictory situation in the sector is reflected in the results. "On the one hand, there is a strong increase in demand for construction work. On the other hand, the growth rate of construction production does not correspond to the increasing demand," he stated.

"The question is whether the bigger problem lies in administrative delays in awarding contracts, or in their completion due to a shortage of materials and employees. At least for the latter type of problems, there is enough evidence in the numbers," Sobíšek added.

According to Křeček, it is precisely the expensive construction materials, high labor costs, and rising land prices that are increasing the costs of building constructions. "This creates pressure for higher prices of new properties. This, in combination with rising mortgage rates, may lead to a decrease in people's interest in buying new properties," Křeček noted.

Results from the EMA data survey for the company Lusq, which focuses on online investment property purchases, indicate that up to 66 percent of Czechs are currently considering investing in real estate, with 12 percent considering it the best option for increasing their finances. "The real estate market is experiencing an incredible boom, and Czechs are literally buying anything - houses, apartments, cottages, land," commented the survey results by Miloslav Lafek, the CEO of Lusq. The survey was conducted on a sample of 1,044 respondents across regions and social classes.
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