“Construction companies are failing to meet approved budgets because of the rapid rise in prices of materials. This can lead to the incompleteness of many projects that run out of financial resources. People who refuse to increase mortgage loans by banks are getting into trouble, ”says BHS chief economist Štěpán Křeček.
Construction output in July this year recorded a year-on-year growth of 0.5 percent. A decrease of 2.2 percent is reported in building construction, where construction workers from abroad and basic materials are missing. On the other hand, production in civil engineering increased by 6.8 percent year on year. At the same time, increased investment activity in the public sector partially crowds out private procurement. Construction companies usually prefer to work on larger projects, such as infrastructure constructions.
In July, building authorities issued 7,635 building permits. That was 2.9 percent more than a year ago. The approximate value of newly permitted constructions reached the level of 87.9 billion crowns. The significant year-on-year increase in the value of permitted constructions by 128.9 percent was mainly due to the issuance of a building permit on line D of the Prague metro. The number of dwellings started in July increased by 30.2 percent year-on-year. The number of completed dwellings then increased by 11.8 percent.
The real estate market is intensively affected by the insufficient supply of flats, which is caused by long-term malfunctioning building regulations. The shortage logically causes a sharp rise in prices. In addition, it was accelerated by the record situation on the mortgage market, where roughly twice the amount of funds was lent compared to the usual situation. Excess money rolling from the mortgage to the real estate market jumps real estate prices and worsens the availability of owner-occupied housing.
Ing. Štěpán Křeček, MBA
As Chief Economist at BH Securities as, he is responsible for creating macroeconomic and market analyzes. He also communicates with the public and the media. As a guest of television and radio programs, he often comments on current economic events. He is currently one of the most quoted Czech economists. He graduated from the Faculty of Economics at the University of Economics in Prague, where he also works and teaches several subjects. From a professional point of view, it focuses on the analysis of the Czech economy, social systems and public budgets. He has written a number of professional papers on these topics. He enjoys sports, reading and listening to classical music.
BH Securities a.s.
BH Securities is a licensed securities trader and a member of the Prague Stock Exchange. The company was founded in 1993, shortly after the establishment of the capital market in the Czech Republic.
Today, BHS is one of the most important non-bank securities dealers on the Czech capital market and has been providing individualized investment services without changing its name or approach for 25 years.
BHS offers a wide portfolio of investment services. In addition to trading on the capital markets, these are mainly asset management, individual investors’ funds, bond issues and trading, mutual funds and investment gold.
More information can be found at: www.investice.cz/ or to: www.bhs.cz.
—
:quality(80)/cdn-kiosk-api.telegraaf.nl/8e513898-1001-11ec-8868-02d1dbdc35d1.jpg?resize=150%2C150&ssl=1)
