The price aspects of housing (Prices)Ing. David Slavata, Ph.D.Housing Economics

The kinds of prices in CZMarket pricesCost pricesMaximal pricesTime direct pricesStop prices

Most of prices in CZ are based on the market prices. Only supply and demand determine the result price.Example: Prices of flats, houses, land, cars etc.Some of goods are under price regulation.Most of flat rents are market based.Some of rents are regulated.

Payments in HousingOwner of the flat payments

Rents

Tenant payments

Payements for ownerPayement = Flat expences (house) + Aadvance Payments

Flat expences (house) = repairs + tax + funds + land rent + administration + accounting + inspections + mortage

Profit = Rent(reven.)-Costs (expences)

Tenant Payements Payement = Net Rent + Advance Payments, Deposit

Net rent = rent per m2 x area of flat + rent from facilities

Advance Payements = water + gas + electricity + waste +.

Three kinds of determinantionRent per m2_______________________________

Adm. regulat. CostMarket

Selected CooperativesOthers cities

Rent regulationPQD

SP1P2aQ1QdQs

New housing construction in CZ

Administrative regulationTradition from 1914 in CZExpecting end 2013 in CZHousing list situation in 70s and 80sDemotivated for individual activity in the field of constructionBigger demage than first and second world war The owner must respect the charge set by the government (low)Disbalance in low protection

Typical points of Czech rent regulationPrice regulation

Legal regulation by civil code

Prices - overview1914-1918rent regulation1918 1938step by step deregulation1939 restoration of rent regulation1953 currency reform in cz1964new civil code - 2K/m219912K/m219924K/m21993rent deregulation law19945,5K/m219956,76K/m219968,50K/m2199712,70K/m2199815,90K/m2199917,39K/m2200018,25K/m2200118,98K/m22006new rent deregulation law201060K/m22012End of regulation100K/m2

Comparison - regulated and market rents in EUR/m2/month

Graf1

0.081.2

0.161.32

0.161.45

0.221.59

0.271.75

0.341.9

0.5082.1

0.6362.3

0.69562.5

0.732.7

0.752.8

0.753.09

0.753.2

0.753.4

0.753.5

0.753.6

13.75

1.53.79

23.87

2.43.95

34

44.05

List1

194811017

194915978

195022685

195118970

195221079

195323631

195421109

195530459

195631238

195728657

195828434

195942852

196050804

196150449

196251773

196348729

196447064

196548200

196645342

196750295

196855624

196954787

197073445

197170226

197275414

197377695

197485616

197597104

197686350

197787872

197883273

197977094

198080661

198163084

198261400

198357078

198457298

198566678

198647080

198749000

198850700

198955073

199044594

199141719

199236397

199331509

199418162

199512998

199614482

199716757

199822183

199923734

200025207

200124758

200227291

200327127

200432268

200532863

200630190

200741649

200838380

200938473

201036442

List1

List2

19640.084.7

19650.084.8

19660.084.5

19670.085

19680.085.5

19690.085.4

19700.087.3

19710.087

19720.087.5

19730.087.7

19740.088.5

19750.089.7

19760.088.6

19770.088.7

19780.088.3

19790.087.7

19800.088

19810.086.3

19820.086.1

19830.085.7

19840.085.7

19850.086.6

19860.084.7

19870.084.9

19880.085

19890.085.5

19900.084.4

19910.084.11.2

19920.163.61.32

19930.163.11.45

19940.221.81.59

19950.271.21.75

19960.341.41.9

19970.5081.62.1

19980.6362.22.3

19990.69562.32.5

20000.732.52.7

20010.752.42.8

20020.752.73.09

20030.752.73.2

20040.753.23.4

20050.753.23.5

20060.7533.6

200714.13.75

20081.53.83.79

200923.83.87

20102.43.63.95

201133.64

201243.54.05

List2

List3

200426824240

200524627242

200634176253

200758298469

200873339450

200953210420

201053774390

List3

Disbalance in Legal regulation Civil code 1991 - 2005Low or no possibility to give a notice to tenant (only by decision of the court)In case of notice the obligation to provide compensation (new flat)The owner must respected even non payerFamilies with children were untachableOwner must respect the regulated rentsNo barriers for tenant notice without reasons

Impact of rent regulation in CZLatent shortage of flats during 100 years in CZGraynessInequityPoor quality buildingsNo efective distributionNo efective constructionAntagonistic clases owners and tenants

Before rent regulation around 1900 Art style

Influence of rent regulation 2012Post socialist ruins

Poor householdsSubsidiesMunicipal flatsPrivate hostelsReception centers for homeless

Problem of increase of rents after deregulation in case of indefinitely agreementAgreement proposal to tenantTwo month term for acception of the proposal In case of no acception three months term for civil actionThe rent is determinate by court on the level of market rent.

Determination of market rent by the courtThe map of market rentsExpert statementSubmitting of minimal three valid agreements from the same house by the ownerSubmitting of pay bills which documents repairing of flat or house

Cost rentTenant (shareholder of coop.)

Pays the rentAgreement

Cooperative (owner of flat)

Cost rent

Rent = mortage + Repairs + Administration + Insurance + Taxes + Rent of land + Last year loss from housekeeping

Impact of cost rent in CZ housingWell maintained housing fond in comparison with administrative regulated houses during the term of rent regulationRelationship of coop members to their house

Market rent

Rent = f (P, F, N, Sch,..)

The rent is determinate by many kinds of factors.

The main factorsPlaceNeighbourhoodInfrastructureCity transportServicesEducationsHealth care servicesPublic officesLabour marketPopulation

Flat Prices in CZ Indexed

Graf1

99.699.1

98.999.6

99.9100.1

101.6101.3

103.8103.5

106.3106.1

110.4108.3

115.2115.6

121.1129.7

128.1140.8

135.3146.5

141.9151.8

149.9159.4

160.6168.2

169.3171

169.7167.3

164.7157.3

155.7144.8

156.5141.8

154.7140.1

152.7140

152.2139.5

151.3138.2

150137.2

147.31Q/11

144.42Q

143.53Q

142.24Q

R - nabdkov ceny

R - realizovan ceny

tvrtlet/rok

index (2005 = 100)

Ceny byt - R (index, 2005 = 100)

g3

g3

99.699.1

98.999.6

99.9100.1

101.6101.3

103.8103.5

106.3106.1

110.4108.3

115.2115.6

121.1129.7

128.1140.8

135.3146.5

141.9151.8

149.9159.4

160.6168.2

169.3171

169.7167.3

164.7157.3

155.7144.8

156.5141.8

154.7140.1

152.7140

152.2139.5

151.3138.2

150137.2

147.31Q/11

144.42Q

143.53Q

142.24Q

R - nabdkov ceny

R - realizovan ceny

tvrtlet/rok

index (2005 = 100)

Ceny byt - R (index, 2005 = 100)

cr_nXr_ib

Indexy cen byt - R - nabdkov vs. realizovan (prmr roku 2005 = 100)

R

- nabdkov ceny- realizovan ceny

1Q/0599.699.1

2Q98.999.6

3Q99.9100.1

4Q101.6101.3

1Q/06103.8103.5

2Q106.3106.1

3Q110.4108.3

4Q115.2115.6

1Q/07121.1129.7

2Q128.1140.8

3Q135.3146.5

4Q141.9151.8

1Q/08149.9159.4

2Q160.6168.2

3Q169.3171.0

4Q169.7167.3

1Q/09164.7157.3

2Q155.7144.8

3Q156.5141.8

4Q154.7140.1

1Q/10152.7140

2Q152.2139.5

3Q151.3138.2

4Q150.0137.2

1Q/11147.3

2Q144.4

3Q143.5

4Q142.2

Urban development in Ostravaprevious

Avredge price of flat in Ostrava in USD

Graf1

26824

24627

34176

58298

73339

53210

53774

51350

List1

194811017

194915978

195022685

195118970

195221079

195323631

195421109

195530459

195631238

195728657

195828434

195942852

196050804

196150449

196251773

196348729

196447064

196548200

196645342

196750295

196855624

196954787

197073445

197170226

197275414

197377695

197485616

197597104

197686350

197787872

197883273

197977094

198080661

198163084

198261400

198357078

198457298

198566678

198647080

198749000

198850700

198955073

199044594

199141719

199236397

199331509

199418162

199512998

199614482

199716757

199822183

199923734

200025207

200124758

200227291

200327127

200432268

200532863

200630190

200741649

200838380

200938473

201036442

List1

List2

19640.084.7

19650.084.8

19660.084.5

19670.085

19680.085.5

19690.085.4

19700.087.3

19710.087

19720.087.5

19730.087.7

19740.088.5

19750.089.7

19760.088.6

19770.088.7

19780.088.3

19790.087.7

19800.088

19810.086.3

19820.086.1

19830.085.7

19840.085.7

19850.086.6

19860.084.7

19870.084.9

19880.085

19890.085.5

19900.084.4

19910.084.11.2

19920.163.61.32

19930.163.11.45

19940.221.81.59

19950.271.21.75

19960.341.41.9

19970.5081.62.1

19980.6362.22.3

19990.69562.32.5

20000.732.52.7

20010.752.42.8

20020.752.73.09

20030.752.73.2

20040.753.23.4

20050.753.23.5

20060.7533.6

200714.13.75

20081.53.83.79

200923.83.87

20102.43.63.95

201133.64

201243.54.05

List2

List3

20042682424010.7

20052462724211.8

2006341762538.9

2007582984699.6

2008733394507.4

2009532104209.4

2010537743908.7

2011513503608.4

List3

Avredge rent in Ostrava

Graf1

240

242

253

469

450

420

390

360

List1

194811017

194915978

195022685

195118970

195221079

195323631

195421109

195530459

195631238

195728657

195828434

195942852

196050804

196150449

196251773

196348729

196447064

196548200

196645342

196750295

196855624

196954787

197073445

197170226

197275414

197377695

197485616

197597104

197686350

197787872

197883273

197977094

198080661

198163084

198261400

198357078

198457298

198566678

198647080

198749000

198850700

198955073

199044594

199141719

199236397

199331509

199418162

199512998

199614482

199716757

199822183

199923734

200025207

200124758

200227291

200327127

200432268

200532863

200630190

200741649

200838380

200938473

201036442

List1

List2

19640.084.7

19650.084.8

19660.084.5

19670.085

19680.085.5

19690.085.4

19700.087.3

19710.087

19720.087.5

19730.087.7

19740.088.5

19750.089.7

19760.088.6

19770.088.7

19780.088.3

19790.087.7

19800.088

19810.086.3

19820.086.1

19830.085.7

19840.085.7

19850.086.6

19860.084.7

19870.084.9

19880.085

19890.085.5

19900.084.4

19910.084.11.2

19920.163.61.32

19930.163.11.45

19940.221.81.59

19950.271.21.75

19960.341.41.9

19970.5081.62.1

19980.6362.22.3

19990.69562.32.5

20000.732.52.7

20010.752.42.8

20020.752.73.09

20030.752.73.2

20040.753.23.4

20050.753.23.5

20060.7533.6

200714.13.75

20081.53.83.79

200923.83.87

20102.43.63.95

201133.64

201243.54.05

List2

List3

20042682424010.7

20052462724211.8

2006341762538.9

2007582984699.6

2008733394507.4

2009532104209.4

2010537743908.7

2011513503608.4

List3

Rate of profit (above) vs hyp. interest (below) in %

Graf1

10.74.5

11.83.6

8.94

9.64.2

7.45.6

9.45.6

8.75.4

8.43.8

List1

194811017

194915978

195022685

195118970

195221079

195323631

195421109

195530459

195631238

195728657

195828434

195942852

196050804

196150449

196251773

196348729

196447064

196548200

196645342

196750295

196855624

196954787

197073445

197170226

197275414

197377695

197485616

197597104

197686350

197787872

197883273

197977094

198080661

198163084

198261400

198357078

198457298

198566678

198647080

198749000

198850700

198955073

199044594

199141719

199236397

199331509

199418162

199512998

199614482

199716757

199822183

199923734

200025207

200124758

200227291

200327127

200432268

200532863

200630190

200741649

200838380

200938473

201036442

List1

List2

19640.084.7

19650.084.8

19660.084.5

19670.085

19680.085.5

19690.085.4

19700.087.3

19710.087

19720.087.5

19730.087.7

19740.088.5

19750.089.7

19760.088.6

19770.088.7

19780.088.3

19790.087.7

19800.088

19810.086.3

19820.086.1

19830.085.7

19840.085.7

19850.086.6

19860.084.7

19870.084.9

19880.085

19890.085.5

19900.084.4

19910.084.11.2

19920.163.61.32

19930.163.11.45

19940.221.81.59

19950.271.21.75

19960.341.41.9

19970.5081.62.1

19980.6362.22.3

19990.69562.32.5

20000.732.52.7

20010.752.42.8

20020.752.73.09

20030.752.73.2

20040.753.23.4

20050.753.23.5

20060.7533.6

200714.13.75

20081.53.83.79

200923.83.87

20102.43.63.95

201133.64

201243.54.05

List2

List3

20042682424010.74.5

20052462724211.83.6

2006341762538.94

2007582984699.64.2

2008733394507.45.6

2009532104209.45.6

2010537743908.75.4

2011513503608.43.8

List3

The main chracteristics of the situationThe prices are affected by the financial criseThe market system after 100 years is balancedSupply exceeds demandThere are no possibilites to reach oversized profitBalanced law protection of tenants and ownersParticipation of private sector on social housing (opportunity for enetrepreneures)High rate of flat reserves

Future of housing marketThe rise of service prices conected with housing (gas, electricity, water.)New construct technologyGetho problems concentration of poorsVacant flatsPrivatisation of state housing stockChanges in quality structure of tenants (partly financial weak hoseholds) Demography