The Hamlet question for 2022: sell or buy a property
Housing has carried a dangerously high price tag in recent years, breaking records even by European standards. Compared year on year, flat values in the Czech Republic rose by almost 20 % in the first quarter of this year. And although sellers report a decline in interest from prospective property buyers, expert estimates suggest that this will unfortunately not push prices down. Rising energy costs, building materials and labour offer little reason for optimism. What will happen next, and do experts recommend selling or buying property?
In the first months of this year, changes began to appear on the property market as a result of rising inflation, increasing mortgage interest rates and, not least, the rising cost of energy, building materials, energy and skilled labour. “Taken together, these factors have led to a fall in demand for buying one’s own property, which was particularly characteristic of last year. However, this reversal in the trend will not result in a significant drop in the prices of flats and houses,” says David Novotný, owner and managing director of Bohemian Estates, a real estate company.
“As owner-occupation becomes financially unaffordable, rental housing is expanding. From this perspective, rentals may appear to be a sustainable investment – rising energy prices, inflation and reduced availability of new mortgages are driving prospective buyers towards rental housing. The renewed interest in rentals is clear; however, we cannot say this has significantly simplified matters for landlords. Property owners must still contribute to the costs of the housing stock and invest in flat maintenance and the repair fund. Even an investment property can therefore easily become a money pit,” explains David Novotný. The solution is to use professional services for efficient and profitable property management.
“Professional property managers will handle all matters related to letting and managing your flat. Your personal administrator will take over communication with tenants, energy suppliers, authorities and maintenance professionals. You can also put all lease agreement expiry dates out of your mind, while experts will help you find new tenants well in advance to ensure your flat remains occupied. If it does not, you as the owner pay nothing; the cost is borne by the property manager,” adds Novotný.
Now is the ideal time to sell
What is causing concern for buyers is at the same time an advantageous opportunity for sellers – they are two sides of the same coin. If you own a property and want to sell it, the current state of the property market is working in your favour. Not only are property prices at an all-time high, but mortgage interest rates are also continuing to rise. “This means that many investors need to buy as quickly as possible. If you decide to sell your flat or house now, there is a high probability that you will still find prospective buyers in a sound financial position. In addition, flats in locations further from the centre or with good transport links outside the city are now also attracting buyers’ attention,” explains David Novotný of Bohemian Estates. If you want to get an idea of your property’s market value, contact property experts and do not rely on the often distorted data found on property portals, where unrealistic property prices are listed.