Welcome to another edition of Real Estate Week — my Monday look back at what happened to housing construction, flat prices and mortgages here in Brno and across South Moravia over the past seven days. As always, in plain language, with no scare stories. If you like hard data, you will find all of it neatly together at the end of the article.
This week belonged to us. The Czech Statistical Office published construction data, and it showed something that has not happened here for a long time: South Moravia is building more flats than Prague. On top of that came a good explanation of why mortgages will not get cheaper even if the Czech National Bank cuts its rates.
Housing construction in South Moravia: a record 8,000 flats under construction
Let me start with the good news. According to fresh data from the Czech Statistical Office, housing construction in the Czech Republic is accelerating — in July, 2,935 flats were started, 11.7 % more year on year, and 3,328 were completed, 46.1 % more than last year. Over the past twelve months, roughly 42,500 flats were started nationwide, which according to Petr Dufek, chief economist at Banka CREDITAS, is the most intensive housing construction since 2022.
And here is the part that matters for us: this growth is not driven by Prague. It is driven by the South Moravian Region. According to Dufek, around 8,000 flats are currently under construction here — an all-time record, with South Moravia overtaking the more populous Prague. Prague's own numbers, meanwhile, remain surprisingly weak.
This does not mean housing in Brno will be cheap tomorrow. It means something else that is valuable: after years of talking about how little gets built here, we are finally building. The flats rising out of concrete around the region today will be real supply in two or three years.
What it means for buyers: for the first time in a long while, patience makes sense. Not because prices will fall — but because the supply of new flats in South Moravia will widen noticeably over the next two to three years, and that does more for your negotiating position than any rate forecast.
What it means for sellers: if you are considering selling an older flat in Brno or nearby, expect to be competing with substantially more new-build supply two years from now. If you are selling "sometime in the next few years", today's market is better than the one waiting for you later.
Do not skip a viewing just because the building is not finished yet. A construction site tells you more about quality than a perfectly lit visualisation. Ask about the building's energy performance certificate, about real heating costs, and about what exactly is and is not included in the price — a parking space and a cellar can add hundreds of thousands of crowns that the listing never mentions.
Why it takes four to eight years to build a flat in the Czech Republic
Now the other side of the same coin. Even with construction picking up, the Czech route from land purchase to final approval remains extraordinarily long — for a small project, typically four to eight years. For comparison: in the Netherlands, a standard building permit is issued in eight weeks, and more complex cases within six months.
That time does not disappear — the buyer pays for it. Over those years the land gets more expensive, materials get more expensive (construction material prices rose by around five percent in the first quarter of this year alone), and the developer keeps paying financing costs. A flat gets more expensive before anyone breaks ground. And when permitting stalls completely, you get what happened in Prague this year: only 1,449 flats were started there in the first quarter of 2026, almost half as many as a year earlier.
That is exactly why I take the South Moravian record seriously. We are not faster because we have different laws — we are faster because projects that got stuck elsewhere actually made it through here.
Czech mortgage rates in September 2026: why they will not fall
I get this question almost every week: "Once the Czech National Bank cuts rates, mortgages will get cheaper, right?" Unfortunately the answer is probably not — and Lukáš Kovanda, chief economist at Trinity Bank, explained it well this week.
The price of a mortgage does not follow the CNB's two-week repo rate, which is what most people assume. Banks derive it from longer-term market rates and interest rate swaps, and those are tied to the global bond market. Put simply: as long as US bond yields stay high, they pull German yields up with them, and Czech yields follow. The International Monetary Fund notes that since 2021, the sensitivity of Czech market interest rates to US monetary policy has increased.
You can see it in two numbers that sit far apart: the CNB repo rate is 3.75 %, while mortgages actually being signed hover around 5.4 %.
What it means for buyers: do not wait for a turnaround that is beyond our central bank's reach. Budget your mortgage at today's rate, and treat any future drop as a bonus.
Be careful with the argument "take it now, you will refinance cheaper in a year". Nobody — not even the CNB — can promise where rates will be in a year. The instalment has to fit your budget at the rate you are signing, not at the one you are hoping for.
Czech household housing debt and more expensive refixing
The last big topic of the week: total Czech household debt on housing rose 17.1 % year on year to 3.7 trillion crowns at the end of June — according to the BRKI and NRKI credit registers, the fastest growth in four years. An interesting detail: the number of contracts actually fell, down by eight thousand to 1,322,000. Fewer people are borrowing, but in larger amounts.
The second thing worth reading twice is the impact of refixing. A model example from the register data: a five-million-crown mortgage over 27 years at a rate of around two percent meant an instalment of CZK 20,000. After refixing at today's average rate — roughly 4.7 % in the first half of 2026 — the instalment rises to just under CZK 26,000 a month.
Six thousand crowns a month extra is not something a household simply absorbs. The good news is that wages are growing — the average gross monthly wage was CZK 51,966 in the second quarter, up 4.3 % in real terms year on year. The bad news is that six thousand a month is still more than most families gain in a year.
What it means for buyers and sellers in Brno
Buying? Do not bet on cheaper mortgages, bet on the specific property. The differences between individual banks' offers, and between individual flats, are larger today than any rate outlook. And if you are not in a hurry, the growing supply of new builds in South Moravia works in your favour.
Selling? There are still plenty of buyers, but their money is expensive and they do the maths. A realistically set price, honest presentation and a documented energy performance certificate matter more today than the address alone. For context: in July, the average asking price of a flat in Brno was around CZK 134,685 per m².
Fixation ending? Start dealing with it at least six months ahead and do not rely on the first letter from your bank. With a competitor's offer on the table, the conversation goes very differently.
What does it mean for foreigners on the Czech real estate market?
Nothing new specifically for foreigners this week — the same rules apply for Czech, EU and non-EU citizens. The construction data, the mortgage rate outlook and the new distance-financial-services law below all apply to everyone identically.
Since that comes up often, here is the evergreen picture that has not changed:
- Who can buy. Any natural person, regardless of citizenship, can buy a flat, a house or land in the Czech Republic in their own name. There is no permit requirement and no residence requirement for ordinary residential property. The same purchase contract, the same cadastral registration and the same rules apply to you as to a Czech buyer.
- Mortgages are the real difference. Banks, not the law, set the limits here. In practice, applicants with EU citizenship and Czech income are treated close to domestic clients, while non-EU applicants are usually asked for a residence permit, income documented in the Czech Republic and often a lower loan-to-value ratio. Bank policies differ significantly, so it is worth comparing several — the difference is bigger for foreign applicants than for Czech ones.
- Everything runs in Czech crowns. Purchase prices, mortgages and cadastral records are in CZK. If you earn in another currency, the exchange rate is a real risk over a twenty-year loan, and a mortgage in a currency other than your income has its own legal regime and warnings under Czech consumer credit law.
- Get it checked. Contracts and cadastral entries are in Czech and the Czech version is what binds you. Have the purchase contract and the escrow arrangement reviewed by a Czech lawyer, and your financing by your bank, before you sign anything. This article is general information, not legal or financial advice for your specific situation.
Briefly from legislation: an "unsubscribe" button from January 2027
Act No. 159/2026 Coll. on distance contracts for financial services was published in the Collection of Laws. It takes effect on 1 January 2027 and brings one very practical change: if you arrange a financial service online and have the right to withdraw from the contract, the provider must offer you a clearly visible button labelled "Withdraw from the contract", available throughout the whole withdrawal period — and must confirm your withdrawal without delay.
One clarification, so there is no misunderstanding: the 14-day withdrawal right does not apply to mortgages. The Czech Consumer Credit Act grants the 14-day withdrawal right explicitly for consumer credit other than for housing. So you will appreciate the new button mainly with renovation loans, insurance policies or investment products arranged online.
The Czech Office for Surveying, Mapping and Cadastre also published an updated list of cadastral offices — purely organisational, but useful if you are dealing with a cadastral registration.
💡 Tip of the week
If you are considering a new build in South Moravia, do one simple comparison now: the price of a new flat in the project you like, versus a comparable older flat in the same neighbourhood plus a renovation budget. At today's rates the gap is usually smaller than people expect — and the decision then comes down to whether you want to move in three months or in two years.
For those who like numbers
I promised hard data — here it is, with sources:
- Construction, July 2026 (Czech Statistical Office, published 7 Sep 2026): 2,935 flats started (+11.7 % year on year), 3,328 flats completed (+46.1 %). 5,622 building permits issued (+4.0 %). Construction output +1.8 % year on year, +0.4 % month on month. Multi-dwelling buildings drove the year-on-year growth in both starts and completions. (source: CZSO, Construction – July 2026)
- Twelve-month total and South Moravia: 42,500 flats started over the past twelve months — the most intensive housing construction since 2022. Growth since the start of the year exceeds one third and is led by the South Moravian Region, which with 8,000 flats under construction has reached an all-time record and overtaken the more populous Prague; Prague's results are weaker. Commentary by Petr Dufek, chief economist at Banka CREDITAS. (source: Hypoindex.cz, 7 Sep 2026)
- Permitting times and input costs: a small development project in the Czech Republic typically takes 4 to 8 years from land purchase to final building approval; in the Netherlands a standard permit is issued in 8 weeks (complex cases within 6 months), in Sweden the average is 56 months, with the fastest municipalities managing 3 years. Construction material prices rose by roughly 5 % during Q1 2026. In Prague, 1,449 flats were started in Q1 2026, almost half as many as a year earlier. Comments by Alan Pock, CEO of Investown. (source: Hypoindex.cz, 7 Sep 2026)
- Rates: the CNB two-week repo rate is 3.75 %, in force since 19 June 2026 (discount rate 2.75 %, Lombard rate 4.75 %). (source: Czech National Bank, monetary policy instruments) Mortgages actually signed stand at 5.42 % according to the Swiss Life Hypoindex. According to Lukáš Kovanda (chief economist, Trinity Bank), mortgage pricing does not follow the repo rate alone but mainly longer-term market rates and swaps tied to the global bond market; the IMF states that the sensitivity of Czech market interest rates to US monetary policy has increased since 2021. (source: Hypoindex.cz, 1 Sep 2026)
- Household housing debt (BRKI and NRKI credit register data): at the end of June 2026 +17.1 % year on year to CZK 3.7 trillion; an increase of CZK 333.4 billion in the first half of 2026. The number of housing loan contracts fell by 8,000 to 1,322,000, there are 2,600 fewer clients, and roughly 60,000 fewer people than at the end of June 2021. Model refixing impact: a loan of CZK 5 million over 27 years at around 2 % = an instalment of CZK 20,000; at the average first-half 2026 rate of 4.7 % the new instalment is just under CZK 26,000. Consumer loans grew by CZK 47.8 billion in H1 2026, with 30,257 more clients (+1.3 %). (source: Hypoindex.cz, 4 Sep 2026)
- Wages, Q2 2026 (CZSO, published 3 Sep 2026): average gross monthly wage CZK 51,966, +6.4 % nominally and +4.3 % in real terms year on year. Median wages are temporarily unavailable due to a data source transition. (source: CZSO, Average wages – Q2 2026)
- Flat prices in Brno (context, July 2026 data): average asking price CZK 134,685 per m². (source: Hypoindex.cz, 21 Aug 2026)
- Legislation: Act No. 159/2026 Coll., amending several acts in connection with distance contracts for financial services — published 2 Sep 2026, effective 1 Jan 2027. It amends, among others, the Civil Code (new Section 1830a: for contracts concluded online, a button labelled "Withdraw from the contract" must be prominently displayed, easily accessible throughout the withdrawal period, and the withdrawal must be confirmed), the Consumer Protection Act and the Consumer Credit Act. (source: Collection of Laws, zakonyprolidi.cz) The 14-day right of withdrawal under Section 118 of Act No. 257/2016 Coll. applies to consumer credit other than for housing — so it does not cover mortgages. (source: Act No. 257/2016 Coll.) The Czech Office for Surveying, Mapping and Cadastre also published Notice No. 161/2026 Coll. listing the cadastral offices. (source: Collection of Laws)
A side note: the Czech National Bank published no new interest rate decision last week. The Financial Administration only issued press releases on the new EET 2.0 cash register system, which does not concern the property market, and none of the Constitutional Court's decisions dealt with real estate, leases or the cadastre. The Ministry for Regional Development announced a call for providers of affordable rental housing on the Šluknov estate — not relevant to South Moravia.
Thanks for reading. See you next week with whatever the market brings.
— Pavel Maloušek, Realiťák Brno