Real estate price development in 2025

According to experts, real estate prices are expected to rise in 2025, which will affect not only the selling price of apartments, but also the usual price for renting land. Although the market may differ regionally, the long-term trend of rising property prices is unlikely to change.

What determines the market price of a property

Determining the market price of a property is crucial not only when selling or buying it, but also in situations such as probate proceedings. Assessing the market value of a property for the purposes of probate is a specific task that requires a professional approach. The value is influenced not only by the size, condition or location of the property, but also by the current market situation.

Here are some of the most important factors:

• Size and layout of the property: the size of the property, including the number of bedrooms and bathrooms, as well as the overall layout and functionality, can greatly affect its value. Larger and more practically designed properties are generally worth more.
• Condition and age: The condition of a property and its age also significantly affect its value. Well-maintained or recently renovated properties are worth more than those in poor condition or in need of significant repairs.
• Location: desirable locations such as proximity to schools, workplaces, public transport and amenities increase the value of a property. This is also why, for example, properties in Prague are significantly more expensive than in other areas.
• Historical and cultural significance: Properties with historical or cultural significance may have a higher value due to their unique characteristics. At the same time, however, they can pose a significant constraint due to conservation concerns.
• Environmental factors: Environmental factors such as recurring natural disasters, pollution and proximity to bodies of water affect not only the value of the property itself, but also the cost of insurance.

As this shows, a large number of factors determine the value of a property. It is therefore difficult for a layman to reliably estimate the price of his property in the real estate market. Therefore, if you are planning to sell your property, it pays to contact a professional. The same applies when assessing the market value of a property for the purposes of inheritance proceedings. You can then turn to us for the actual legal aspects of selling your property. We will provide a full contractual and legal service for you and we will handle it within 48 hours, flawlessly and professionally.

What influences the rise or fall of property prices

Many factors influence the development of property prices, such as the economic situation, supply and demand or the influence of investors. Rising prices are often associated with strong demand, limited supply and low interest rates. Conversely, a fall in prices can be caused by an economic recession or high supply in the market.

These are key factors:

Factors that can increase property prices

• Strong demand: High demand for housing increases house prices. Factors such as population growth, job opportunities and lifestyle changes can contribute to increased demand.
• Low interest rates: when banks offer low interest rates, it allows more people to finance their property purchase with a mortgage. This can ultimately increase demand and push prices up.
• Limited supply: a lack of available properties can lead to high competition among buyers who are racing to see who can offer the most. This then naturally drives up prices.
• Economic growth: a strong economy associated with job creation and income growth can lead to higher house prices as people gain more purchasing power.
• Investor activity: real estate investors, including institutional investors and individual buyers, can influence prices through their purchases and investment strategies.
• Government policy: Tax incentives, subsidies and other government policies can stimulate demand or restrict supply and affect prices.
• Infrastructure development: Investments in infrastructure, such as new highways, public transportation, or major development in an area, can increase the attractiveness of an area and thus increase real estate prices.

Factors that can reduce property prices

• Economic downturn: during an economic recession, job losses and reduced income can also reduce demand for housing and cause prices to fall.
• High interest rates: Rising interest rates increase the cost of mortgages and other loans, which then become less affordable for buyers. This in turn reduces demand and leads to lower house prices.
• High supply: if there is a surplus of available properties relative to demand, prices tend to fall due to increased competition between sellers.
• Decrease in attractiveness of a location: negative changes in an area, such as an increase in crime, deteriorating infrastructure or the disappearance of jobs, can lead to a decrease in property values and a fall in property prices on the property market.
• Tighter lending conditions: If banks tighten their lending conditions, the number of qualified buyers will decrease, pushing prices down.
• Regulatory changes: New zoning regulations or property taxes that increase the cost of home ownership can negatively reduce home prices.
• Speculative activity: If the real estate market experiences excessive speculation and price bubbles, the subsequent correction can lead to lower prices.

When it pays to buy or sell a property

When deciding whether to buy or sell a property, it is advisable to take into account the current property price, for example the price of an apartment or the price of renting an apartment per m² in a given location. This information can help you determine whether the market is favourable for buyers or sellers.

When is it worth buying a property

• Prevailing supply: the market is at its best when supply exceeds demand. This usually leads to lower prices and more bargaining power for buyers.
• Low interest rates: Low mortgage rates can greatly benefit the purchase of a property due to lower monthly payments and the overall lower price you end up paying for the property.
• Good job market: A strong job market can be an indicator of future property appreciation and therefore a good time to buy.
• Market Trends: study real estate market trends and forecasts. Look for factors such as population growth, job opportunities and infrastructure development that can affect property values.

When it pays to sell a property

• Prevailing demand: in a situation where there is a shortage of property supply on the market, buyers are willing to pay more for a property. Therefore, it pays to wait until this time to sell.
• Property appreciation: If your property has appreciated significantly since you bought it, it could be a good time to sell before its value drops again.
• Timing: consider selling during spring or early summer, when the property market tends to be more active.
• Economic indicators: pay attention to economic indicators such as interest rates, inflation and unemployment rates. A strong economy usually leads to a healthier real estate market.

We are also noticing changes in the property market thanks to our offer of legal assistance in the case of buying or selling a property. Whenever the real estate market turns in favour of buyers, we see an increase in demand for assistance with the purchase of a property and vice versa. And if you need help, we can help you too.

Real estate price development in 2025

According to experts, the demand for real estate in the Czech Republic is expected to increase in 2025, which will lead to further price increases. This is due to the improving economic situation and a gradual slight reduction in mortgage rates. Older flats should become more expensive by units of percent due to lower housing construction and limited supply on the market. Rents should also rise similarly. The value of investment in commercial property should increase compared to this year.

Real estate consultancy Knight Frank predicts that owner-occupied and rental housing will become 5 to 10 percent more expensive in 2025. Lower affordability of owner-occupied housing will lead to further development of rental housing. Investors will continue to favour sectors such as logistics in addition to rental apartments.

The Affordable Solicitor has also noticed this trend – more and more people are contacting us for help with renting a property. So this too is one of the consequences of high mortgage prices driving people into renting.

CBRE expects investment in commercial real estate in the Czech Republic to significantly exceed CZK 50 billion (EUR 2 billion) in 2025, up from around CZK 38 billion (EUR 1.5 billion) in 2024. Domestic entities are expected to account for the majority of investment, but interest from foreign investors is also expected to grow again.

Jakub Veverka, economist and director of real estate portal Videobydleni.cz, says that stabilising inflation and falling interest rates indicate a positive development, but high energy and building material prices still pose a challenge for the market.

It is also expected that in 2025 the prices of building materials will rise by 5-7%, which may increase the attractiveness of already built properties. Increased interest in eco-friendly and rental housing will dominate investment trends, while the digitalisation of the market will offer new opportunities for sellers and buyers.