<p>Due to the decline in demand for new apartments, the crisis cannot</p>

Prague - The decline in demand for new housing is primarily due to demographic changes, a decrease in the attractiveness of apartments for investors, and partially satisfied demand through the privatization of municipal apartments. The slowdown in sales was thus predictable, as it would have occurred even without the crisis, said Jiří Pácal, director of Central Europe Holding, today at a discussion meeting of the Association for the Development of the Real Estate Market.
The postponement of purchases, according to the real estate expert, plays only a minor role in the decline in demand. Much more significant, for example, is the decrease in the number of young people aged 26 to 30, who represented the main customers for builders. Apartments are also no longer as attractive for investors, as the growth in property prices and the decline in market rents have reduced their yields to below three percent. The market has also been disrupted, according to Pácal, by the privatization of municipal apartments. All these factors have reduced the purchase of new apartments by 20 to 30 percent. Additionally, the availability of mortgages has worsened.
According to the expert, the path to recovery must also include legislative changes. Among these should be the immediate repeal of rent regulation or the adoption of a new law on property ownership. Pavla Schödelbauerová from the Ministry of Regional Development, however, stated in the discussion that the new law on property ownership cannot be expected this year.
According to Pácal, a quick repeal of rent regulation, which has now been extended until 2012 in most regional cities, is necessary to correct the market situation. "Rental housing is necessary for the market of ownership apartments to function," noted the head of Central Europe Holding. According to the expert, another enormous opportunity for the market lies in the repairs and modernizations of the existing housing stock, which is often in a catastrophic state.