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Prague - Thousands of new flats in the Czech Republic are waiting for owners. Bankers and real estate brokers estimate the number to be higher than 5,000. "New" in this context means flats approved for use no more than three years ago.
The unsold flats are usually situated on the ground floor or next to busy roads. They were often built by small companies which, unlike their big rivals, have too little money for advertising.
Analysts say the number of empty flats will increase in the years to come.
"Demand for new homes is already falling. This is due not only to more expensive mortgages, but also to the reform which has raised costs," says Jaroslav Novotný, president of the Association of Real Estate Offices.
He adds interest is also lower because of stricter conditions for mortgage loans. This is confirmed by last month's data from the Regional Development Ministry, which show the volume of newly granted mortgage loans fell for the first time after many years in the first quarter of 2008.
Housing experts say lower demand will also affect the prices of new flats, which will stagnate or drop this year. The prices of some flats, especially those in prefab housing, are already beginning to fall for the first time in years.
In 2007 builders completed almost 42,000 homes and started to build almost 44,000, the highest number since 1993. The average floor area of homes completed in 2007 fell to 70.4 square metres.
Adapted and republished by the Prague Daily Monitor