In Prague, property prices and interest rates hit record highs

While mortgage rates in the Czech Republic fell below 2% per annum for the first time, apartments in the capital “broke through” the historical maximum of €2,200 per sq.m.

According to Fincentrum, in March 2016 the average interest rate in the Czech Republic fell to 1.97% per annum. In the previous month, its value was 2.02% per annum.

The center's analysts admit that in reality people were given mortgages at 1.9% per annum and lower. They expect this figure to fall further.

All indications are that the mortgage boom will continue. Potential buyers are finding it increasingly difficult to find a property that suits their budget. This should lead to an increase in bank financing.

In the first quarter of 2016, the average price of apartments in Prague increased by 8% year-on-year. The main reason was the lack of housing on the market. According to the study, in the first three months of the year, the price per square meter rose to a record high of €2,220.

Developers say the number of offers on the Czech capital's market has fallen by 20% in a year, primarily due to delays in the construction of new residential complexes caused by the protracted process of project approval by local authorities.