Czech Mortgage Market Shows Resilience Despite Rising Prices, Survey Finds
Prague, Czech Republic – Despite soaring property prices, the Czech mortgage market is demonstrating surprising resilience, fueled by considerable household savings accumulated during the COVID-19 pandemic. A new survey conducted by IPSOS for the Czech Banking Association (CBA) reveals that 5% of Czechs plan to seek a mortgage within the next two years, with an additional 13% considering one in the longer term.
According to Jaromír Šindel, Chief Economist of the CBA, several factors are at play. “plans regarding future mortgages are influenced by a high level of savings, a high rate of property price growth, and the aging of the population,” he stated.
The significant savings – currently totaling approximately three trillion Czech crowns – are largely a result of limited spending opportunities during pandemic lockdowns. This financial cushion is enabling some prospective buyers to navigate the increasingly challenging housing market.
Despite the sharp increase in real estate prices, the CBA anticipates solid growth in the mortgage sector. In September, the association predicted banks could issue 301 billion CZK in housing loans this year - a substantial 33% increase compared to the previous year.
The survey also indicates a strong belief among potential homebuyers that property prices will continue to climb, with around 70% anticipating further increases. However, those looking to enter the market should prepare for higher repayment costs. Many are facing the end of fixed-rate mortgage periods secured during the era of historically low interest rates, leading to possibly significant increases in monthly payments.
This shift in the mortgage landscape underscores the importance of careful financial planning for prospective homeowners in the Czech Republic.
Keywords: Czech Republic, Mortgage Market, Housing Prices, Interest Rates, Savings, Czech Banking Association, Real Estate, Economy, Finance.
