Prices for apartments and homes are already falling and it is only a matter of time before the prices of offices, shops, warehouses and production facilities follow.
Prices could fall by a fifth or even by a third, according to the international real estate company King Sturge. The outlook is prompting major developers to move into infrastructure instead as much of the funding comes in the form of European Union grants.
'We expect a number of major buildings and properties to come on the market next year, as financial circumstances will force their owners to sell,' said Dušan Štastník, an analyst with King Sturge.
Property owners are running out of resources to pay bank installments and receivers are becoming busier as the demand for property leases and subsequently the quantity of vacant properties begin to result in forced sales.
The latest figures show that vacant areas in industrial and logistics centres have increased to 18%, from 9% a year ago. Unoccupied office space has risen from 6 to 10% of their total area.
The banks are no longer able or willing to lend large sums of money. As a result, many developers are likely to abandon, or at least postpone the planned launch of new projects, the company predicts. Some developers are trying to sell entire residential projects while others are looking for strategic business partners.
Sekyra Group, one of the biggest developers in the country, is trying to sell some projects. 'We have re-evaluated the cost-efficiency of small residential projects and have decided to sell some of them,' said Sekyra spokesman Radek Polák. The company is looking to infrastructure projects as having a better future and has set up a new subsidiary to bid for work.
Orco Property Group, another real estate giant, is looking for partners for its project in Praha-Bubny.
