A new government scheme providing relatively cheap loans to young people to buy or renovate homes has just been launched. However, with prices continuing to soar many may still find it difficult to find suitable properties.
The interest rate is a very attractive 1.0 percent guaranteed for a period of 20 years, though in exceptional cases the loans can be repaid over 25 years.
The State Housing Development Fund will consider applications on a first-come, first-served basis, leading to queues at its offices on Prague’s Vinohradská St. Some applicants said they had been there since Tuesday afternoon.
CZK 650 million has been earmarked for the scheme in 2018, with that figure set to rise to CZK 1 billion annually in future.
The state loans can be combined with regular mortgage loans, though it is not possible to use the money to repay mortgages.
Under the system, which has been created by the Ministry of Regional Development and was approved by the government in June, up to CZK 300,000 is available for families seeking to do up their apartments.
Those who purchase a flat can draw on up to CZK 1.2 million, while the figure for houses is CZK 2 million. Loans can cover up to 80 percent of the real cost of construction or purchase.
However, acquiring a state housing loan looks set to be just the start of the battle for a lot of young families.
Analyst Josef Rajdl of Fincentrum told Czech Radio that there were many ways to acquire financing but finding a property at a reasonable price was another matter entirely.
Real estate agent Jakub Němec pointed out that property prices had begun soaring three years ago, on the back of the positive economic situation, extremely low unemployment and – above all – very low interest rates.
That has pushed the market upward and caused it to essentially become sold out, Mr. Němec said.
A spokesperson for the State Housing Development Fund, Karolína Smetanová, said, however, that the new scheme was not aimed at big cities like Prague, where prices have been rising fastest.
The agency’s aim is to support young people in the regions, Ms. Smetanová told Czech Radio.
She said that some had, for instance, received help from their parents in starting to build a house and now were seeking means of completing the construction.
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