The prices of new apartments in Brno continued to rise last year, and their sales also increased

Brno - The prices of new apartments in Brno rose by 23 percent year-on-year last year, with the average price per square meter at 100,100 crowns. At the same time, sales also increased, with the number of sold apartments in new developments rising by a quarter compared to 2020, reaching 1,192. This was stated by František Šudřich, the director of Impera Styl, who has long been monitoring the developments in prices and sales in the new housing market.

"The second quarter was the most successful quarter for sellers of new developments in Brno since the economic crisis 13 years ago. The interest in new apartments did not wane even at the end of the year, despite rising mortgage rates. This is partly due to the increasing number of investment purchases. Some buyers, who were considering or postponing a purchase, were also alarmed by the rising rates and tried to make their planned purchases at an acceptable interest rate in the second half of the year," said Šudřich.

The increase in sales was also facilitated by the growing number of apartments on offer. At the beginning of this year, 750 new apartments were available on the market, which is half as many more than a year ago. This number is supplemented by 450 apartments that are currently reserved, and their sale has not yet been completed with a signed contract.

The supply of new apartments was expanded last year by construction in the part of Brno around Cejl and Bratislavská streets in the Brno-střed district. "This part of the city, nicknamed the Brno Bronx, has seen unprecedented development in residential construction, which was also reflected in the number of completed transactions in the past year. In the Brno-střed district, 490 new apartments were sold. The second most popular location was the Královo Pole district with 263 sold apartments," reported Šudřich.

The most popular layout for new apartments in 2021 were one-room apartments, which constituted 40 percent of sold apartments, and interest in them increased by a quarter year-on-year. Until 2020, buyers were most interested in two-room apartments.

The average price per square meter in new developments has essentially doubled since 2015. While the average price then was 50,200 crowns per square meter, in 2021 it rose to 100,100 crowns. The price was influenced, among other things, by the high demand; its cooling at the end of the year also led to a stagnation in prices.

Last year, the average price per square meter was highest for one-room apartments, averaging 127,500 crowns, for two-room apartments it was 120,000 crowns, for three-room new apartments it averaged 124,000 crowns, and for apartments with four or more rooms, which are usually the least sought after, it was 118,000 crowns.

For buyers interested in a two-room apartment of 58 square meters, this meant they would pay seven million crowns for housing, while a so-called studio apartment with one room and a kitchenette of 36 square meters would average 4.65 million crowns in a new apartment.

This year, according to Šudřich, the supply of new apartments should continue to grow. "A relatively large number of new projects are in preparation, which could release a larger quantity of apartments onto the market. In combination with the expected decline in demand, it is likely that the prices of new apartments will rather stagnate. High mortgage rates, which, according to the Czech Banking Association, could rise above five percent in the coming months, mean an increase in the average mortgage payment by 5,000 to 6,000 crowns per month. Such expensive mortgages could discourage many interested buyers from purchasing," concluded Šudřich.