Apartments in Brno have become more expensive again, interest is mainly in the smallest ones

Brno - The prices of new apartments in Brno increased by 7.5 percent last year. Although this is a smaller increase than the previous year, when they rose by as much as 15.6 percent, prices have risen so high that interest in two-room apartments has decreased. At current prices, people with average incomes cannot afford them. This follows from an analysis by the company Trikaya, which has been monitoring the real estate market situation in Brno over the long term.

Last year, the best-selling apartments were one-room units, whereas previously there had been greater interest in two-room apartments. "Sales from last year show us that people with average incomes can hardly reach large apartments due to rising prices and mortgage regulations. Therefore, people are downsizing and opting for new, but smaller apartments, or older units, but even there prices are rising," said Alexej Veselý, the executive director of Trikaya.

One-room apartments with an average size of 35 square meters accounted for over 40 percent of all sales among new constructions in 2019. While the average one-room apartment of 39 square meters cost 3.2 million crowns in Brno last year, a 2+kk apartment with an area of 56 square meters cost 4.55 million, and a 3+kk apartment with an area of 81 square meters was priced at 6.6 million crowns.

Overall, there are still over 500 available apartments on the market, with a price of 82,500 crowns per square meter. However, according to Trikaya, there is a shortage of 2,500 apartments in Brno. Thus, prices are not inflated by an artificial real estate bubble, but rather by strong demand for new housing and a lack of suitable apartments.

This is also confirmed by the Association of Brno Architects and Builders, which claims that bureaucrats are blocking apartment construction. "Last year, construction in Brno was paralyzed by the poor functioning of the Department of Urban Planning and Development; only with the new leadership has the situation been improving since the end of the year. Instead of allowing the private sector to invest in the city's development and the construction of new housing, new demands and restrictions are continuously being created. Any additional requirements are driving up the cost of apartments and affecting those interested in housing in the city. It is they who will pay for the infrastructure that the city has transferred for a symbolic amount of a thousand crowns," said Marek Vinter, the chairman of the association's board.

Representatives of Trikaya do not expect property prices in Brno to decline in the near future. In addition to the lack of available land for development, the costs of construction materials are also rising, and there is a shortage of workforce in construction.

"However, hopes for a decrease in property prices in Brno arise from changes to the zoning plan. The Office of the Architect of the City of Brno is preparing to release several unused industrial areas for development, such as locations in Slatina, Maloměřice, or Obřany. The city itself is also preparing several sites for its own housing development, which will include several hundred new city apartments," František Šudřich from Trikaya stated in the report. He also pointed out that construction companies are fully occupied, so there will be no one to build the planned residential projects.