"We have had a difficult year. The economic difficulties caused by the energy crisis, the central bankers' struggle with raging inflation and the Czech economy's fall into recession all have a significant impact on the real estate market. Its atmosphere is reminiscent of the sultry atmosphere before shootouts in Sergio Leone's westerns: the actors wait stiffly and nerves vibrate," says Prokop Svoboda, Owner of the Svoboda & Williams real estate agency.

Data for the last quarter of last year show a steady decline in demand for properties for sale. However, it also clearly confirms that quality real estate can maintain its value even in uncertain times: in the segment that Svoboda & Williams has been monitoring for a long time, the average price of a property sold increased by 0.6 percent in the half-year comparison. "Every era generates winners who want to live their success in the here and now. As a result, we saw some exceptional transactions at the end of the year, which reinforces our belief that quality real estate remains a stable base for investors in a volatile environment," confirms Svoboda.

As of the fourth quarter of 2022, Svoboda & Williams' clients paid an average of CZK 158,412 (€6,600) for an sqm of new construction and CZK 141,209 ( €5,900) for an sqm of re-sale. While in Prague 1 the average price per sqm of a new build was CZK 213,441 ( €8,900), the cheapest price for a new property in Prague 9 was CZK 119,981 (€5,000) per sqm. "For the first time in the history of our Market Reports, clients taking out a mortgage to buy a flat account for less than 35% of all transactions," says Kryštof Kušiak, an analyst at Svoboda & Williams. Almost 70% of Czech buyers who finance their purchase with their resources point to the high purchasing power of local residents, for whom quality real estate serves as a "Safe Haven" to save funds in times of high inflation.

The real estate market also saw another record high in rental price growth in the last quarter of 2022. "According to the S&W Rental Index, rents in Prague have risen by 23 percent year-on-year, with rents for small-size flats 1 + kk to 2 + 1 in the centre of Prague rising by as much as 40 percent to an average of CZK 31,030 ( €1,300), while the average rent price across the whole of Prague reached CZK 39,800 ( €1,670)," Kušiak explains. According to the Svoboda & Williams analysis, however, rent prices in Prague and Brno are starting to run up against economic reality.

"The usual decline in demand for rental housing at the end of the year was even more pronounced last year compared to the boom in interest in the summer months," says David Šimeček, Head of Residential Rentals. "We have seen multinational corporations cutting back on expat relocations to reduce costs ahead of the expected recession," he adds. Weaker interest is also influenced by weakened real purchasing power, which according to the CSO fell by a tenth in the second half of last year. "We can therefore expect that the inflated bubble around rental housing will be corrected in the coming year," concludes Prokop Svoboda in his outlook for the coming months.