The price of properties in the Czech Republic grew by an average of 16 percent through most of 2017, registering the fastest increase in the EU, according to a Financial Stability Report issued by the Czech National Bank (CNB). Eurostat data also indicate that 2017 housing price growth was fastest in the Czech Republic (up 11.7%).
The sharp spike in home prices in the country has worried the central bank, with
officials saying the conditions for a spiraling of the difference between property prices and the cost of loans remaining in place. CNB has identified this as the greatest risk to domestic financial stability since 2016.
The lack of apartments on the market and the continuing high demand has had a long-term impact on prices. At the end of 2017, approximately 8,100 units were under construction in Prague- the lowest result since 2014- while the total number of completions reached 6,176 apartments, which is 5% below 2016 levels according to Property Forum. This year only about 5,000 units will be completed, a significant decline compared to 2017.
However, it's not just in the Czech Republic where people are paying more for homes. The Global House Price Index by Knight Frank finds that average house prices have gone up 6.5% across 55 countries.
Iceland was at the top of the Index with an average price growth of 17.8%, followed by Hong Kong (14.4%), New Zealand (13.8%) and Canada (13.5%) Topping the list from Europe were Malta (12.6%), Czech Republic (11%), Estonia (10.7%) and Hungary (10.5%). China was 10th on the list (10.3%).
The London-based real estate company publishes this report since 2006 using official government statistics or central bank data where available.
House prices, including purchases of both new-build and existing houses and flats, have fluctuated significantly since 2006 according to Eurostat, the European Union’s statistics office.
Annual growth rates in the EU were around 8 % in 2006 and 2007, followed by a fall of 4 % in 2009 as a result of the financial crisis. Prices started growing again in 2014.
Overall, house prices rose 11 % in the EU between 2010 and 2017 and 6 % in the euro area. Among the member states, the highest increases during this period were recorded in Estonia (+73 %), Sweden (+56 %), Austria (+49 %), Latvia (+47 %) and Luxembourg (+40 %), and the largest decreases in Spain (-17 %), Italy (-15 %) and Cyprus (-9 %).