The square meter of a new apartment in Brno has increased to 124,500 CZK

Brno – The prices of new housing in Brno continued to rise in the third quarter of this year. The average price per square meter in new buildings increased to 124,500 crowns, which is ten percent more than in the second quarter and even 41 percent more year-on-year. This was reported by a real estate company in its regular quarterly analysis, which has long been monitoring prices of new housing in Brno.

According to the analysis, demand for new apartments is not decreasing, despite constantly rising prices. From July to September, 184 individuals and companies purchased new apartments in Brno. Four out of ten apartments were so-called studio apartments, meaning one-room apartments. "The price increase was not halted even by the release of 300 new apartments for sale. Every buyer, on average, paid 70 percent more for an apartment than five years ago. Nevertheless, new apartments do not remain on the market for long and are usually sold long before occupancy approval," stated Alexej Veselý, the executive director of the development company.

The average price of new apartments is driven up by projects in the part of Brno known as the Brno Bronx. Between Bratislavská and Cejl streets, apartments are now being offered at an average price of nearly 135,000 crowns per square meter. Thus, for an apartment with an area of 30 square meters, people may pay up to 4.5 million crowns. "The situation is somewhat paradoxical, as this location recently offered affordable new apartments near the center. Prejudices about the problematic locality have been mitigated by the greater availability of properties. However, high demand in the tight Brno market quickly escalated prices of apartments even in this area, contrary to expectations above the overall Brno average," added business director František Šudřich.

The supply of new housing in the third quarter of this year increased by nearly 300 apartments, or 20 percent, with a total of 574 apartments on the market. The average price per square meter is highest for one-room apartments, reaching 132,900 crowns, for 2+kk apartments it is 117,000 crowns per square meter, for 3+kk apartments it is 111,000 crowns per square meter, and for 4+kk and larger apartments it is 112,500 crowns. A two-room apartment with an area of 58 square meters now costs 6.8 million crowns, while a 1+kk apartment with an area of 36.5 square meters costs 4.9 million crowns.

As stated by Marek Winter, representative of the Association of Brno Architects and Builders, prices of new buildings in Brno are approaching those in Prague. "We expect that inflation growth will partially support demand for properties, as buyers will be motivated to invest their savings to protect them from significant devaluation. On the other hand, people who are buying new apartments primarily for their own housing are getting into trouble," Winter added.

Along with the limited availability of apartments directly in Brno, prices of new buildings around the city are also rising. Last year, apartments in the Brno-venkov district were sold at an average of 64,000 crowns per square meter, but over the past year, the price has increased to 95,000 crowns per square meter, an increase of 50 percent. "The demand for housing within a reasonable distance from Brno is high. A family apartment in the city is an unattainable goal for many residents due to extremely high prices, and so they are turning to areas outside the city. However, it is now becoming evident that enormous interest is also driving up prices in these areas," stated Šudřich.

The city management is also looking to increase the availability of housing in Brno, planning to build up to 1,300 cooperative apartments in the coming years. The city will build them without profit, resulting in lower prices for the apartments. The cooperatives will take out loans for the construction of these apartment buildings, which people will repay in the form of rent. Thus, even those who currently cannot meet the conditions for a mortgage loan due to property prices should be able to achieve homeownership.