Overall the markets seem to have stabilized and there was some pent-up demand being satisfied in 3Q 2009. Statistics have shown a price increase of 0.5% for this period. Prices outside of Prague increased by 2.1% while Prague itself decreased by 1.4%. Q1 and Q2 of this year saw a combined fall in prices of around 7% over all of Czech Republic, according to statistics.

Not too bad considering the banks’ current mortgage lending and the recession thinking which plagued everyone.

Below are some details from individual areas:

Brno: Prices have fallen over Q1 and Q2 of this year similar to the figures for all of Czech Republic. However, in the last month we have sold three flats only 8% under their peak price in late 2007. All three were reserved within days of being listed. If the owner had not been keen to move them quickly we feel we could have sold them at only 5% under peak prices. The client was using our Gold PoA Sale Service.

The prices the flats were sold for and the proven rental on them gave them a rental yield of 7.3%. Up considerably from the 5% which late 2007 saw the flats being sold for.

Prague: Prices have moved down slower than other areas but seems to now still have the momentum as it saw the biggest continued decline in 3Q 2009.

Ostrava: Prices has fallen similar to Brno but it didn’t see the jump in 3Q that Brno saw. It might be a slow starter.

With some pent-up demand being seen in purchases now we feel that the absolute best purchasing window may have passed now. We don’t think buyer’s will have the upper hand as strongly as they did about two months ago.

However, we expect it to remain overall a buyer’s market and prices to remain stable at least until spring 2010. If you have been holding off on a purchase of a rental property, this is a great time to get yields of 7 to 8%. With mortgage rates at around 5% and 80% LTV it is a good time for strong buyers to pick up some cash flow positive properties!

Nathan Brown