Mortgages rose again in July, their price rising the fastest since December 2018. On average, banks offer them an interest rate of 2.23 percent. This is shown by data from Fincentrum Hypoindex. However, the average amount of a loan for new housing is also record-breaking. Real estate in the Czech Republic has risen in price by more than half in five years, making mortgages unavailable to many clients now.
Loan interest rates: their influence over housing price.
On average in the national average, the average mortgage amount has been rising for several months in a row. In the last year alone, it has risen by almost half a million and in July exceeded its current highs. It can also have an effect on the older age at which children leave their parents’ apartment; last year, according to Eurostat data, it was on average only 26 years old.
Therefore, especially in larger cities, according to analysts, the future is mainly in rental housing, but even finding a subleased apartment is more difficult for many.
Loan interest rates: the possible solutions.
Intergenerational mortgages, which are used mainly in Western countries, could be at least a partial solution to the unavailability of housing. It has been repaid for several decades, and from the beginning, it is expected that parents will hand over the mortgage to their children. At the same time, the average repayment period of some Czech banks already exceeds twenty years.
Loan interest rates: future forecast.
According to analysts, further growth in mortgage interest rates can be expected. Significant price increases in housing are also evidenced by Eurostat data. In the European Union, last year’s real estate prices were on average a quarter higher than five years earlier. In the Czech Republic, they have risen by more than half during that time. The mortgage interest rate is also rising, which stood at 2.23 percent in July. This is the fastest price increase in the last two and a half years.
The rise in rates also slightly reduced the volume of new mortgages, by more than nine billion crowns month-on-month in July, but this year should be a record year in terms of negotiated contracts. “It is likely that growth will continue, as the Czech National Bank will continue to raise interest rates and market interest rates, which will be reflected in mortgage rates, are likely to rise gradually,” said economist Patria Jan Bureš.
Source: ČESCKÁ TELEVIZE
