The last quarter of last year meant a decrease in the offer prices of new apartments for Brno, which reached 124,800 kroner per square meter. And while the downward trend is expected to continue, the first three months of this year have been different. The beginning of 2023 did not continue the downward curve, and the price returned to 126,200 kroner, which is practically the same level as in the third quarter of last year. However, sales were down 60 percent year-on-year.
Data from Trikaya, which has long tracked the state of the Brno new construction market, also shows that 108 new apartments were sold in Brno in the first three months of 2023, slightly more than in the previous two quarters. . “From the development of the first quarter of this year, we can see that the market of new buildings has not moved yet. The exception is real estate in higher-end projects in good locations. There should be an attractive price here as well.” Dalibor Lamka, CEO and Chairman of Trikaya Company, says.
The change occurred in the disposal of sold apartments. For a long time, existing 2+kk apartments dominated, but now studios are doing the best, with the highest average price per square meter. In the first quarter, it reached 134,547 kroner. The least sold were generously designed apartments with a floor plan of 4+kk and more – only 18 of them sold, while 37 of the smallest apartments with an average area of 36.5 square meters were sold.
“This clearly shows that smaller apartments and more energy-efficient projects are being sold in sought-after locations.” Clarifies Lamech. As for the realized price, there was a slight decrease compared to the last quarter of 2022, from 131,176 kroner to approximately 130,000 kroner per square meter.
Apartments within the Ponavia Rezidence project are selling well
There was also little change in the number of new apartments offered. If there was an increase at the end of last year, now it has decreased by 111 units to 1436. The largest number of apartments was in the first quarter of 2023 in Zabrdovice district. The best-selling apartments, almost half of the total volume, were located in Králové Pola, where the best-selling projects of the first quarter were Ponavia residence, Rostislav Residence and Starý pivovar.
Despite the offer of new apartments, many development companies are delaying the start of construction of new projects. “Activity will freeze in the construction industry, which is in the grip of rising costs and falling demand. Therefore, in the near future we can expect a smaller number of completed buildings, which will prevent their price from falling.” Cirrus Chief Economist Vít Hradil explains.
According to him, however, there is still concern among households who do not have the desire and ability to buy real estate due to the increase in consumer prices and the deterioration of the economic situation. However, he adds, there doesn’t appear to be much willingness to act even on the part of vendors. They understand that it is not a good time to sell real estate.
“Thus, many of them are trying to “sit down” the situation in the hope that the situation will improve again in the near future and they will pull the strings in the negotiations. In many cases, only their own difficult financial situation would make them decide to sell, but given the persistence of unemployment, this will be a rare occurrence.“Hradil describes.
The data so far shows that new construction remains steady, while the resale real estate market has slowed. According to Hradil, there may be a recovery in the last quarter of this year, but especially in early 2024, when analysts expect a gradual discounting of mortgage loans. Therefore, if there is a decline in real estate prices, it is likely to be short-lived and limited to specific locations and market segments.
“The general economic situation is starting to improve, the first reduction in interest rates is on the horizon, and the decrease in activity in the construction industry will lead to a shortage of new properties on the market. The first half of 2023 will probably be marked by a slight decrease in prices, but then there will be a stabilization, and then a price increase again.” Vít Hradil concludes.
Trikaya real estate group has been monitoring the new construction market in Brno since 2013. It draws data from a statistical database based on all apartments offered in new buildings in Brno in regularly published analyses. The source of information is price lists of individual development projects and developers published online.
Average offer price of new apartments in Brno