Český Objektiv |
Accessibility to property related information and values
All players in the real estate market - private buyers/sellers, investors, banks, governmental authorities, municipalities etc. need to ascertain values in order to accomplish their own strategic plans and to make informed purchase or sale decisions.
With the exception of rent control [which is only now beginning to be relaxed], the real estate market has been influenced significantly by free market behaviour in recent years in the Czech Republic. However, there remains a lack of information concerning property values available to both private buyers as well as for professionals operating in the market. Collection of price related data is not commonplace and participants in the real estate market do not willingly share data concerning property values, due to of the degree of effort and cost involved in obtaining the data which is of interest to the competition. In many other countries this information is much more widely available due to both the collection of such information being supported by governments and due to the greater degree of maturity of such markets.
Price maps seem to be one of the most suitable and comprehensive tools available to a participant in the market. There are two different types of price maps – those made by municipalities (conforming to the law) and those assimilated by private bodies such as banks or valuers (to support their business activities). The latter are maps which are private and not generally accessible to individual buyers and sellers. As regards the former, there are 19 cities which have a regular updated price map. From these, 13 price maps are available from the internet, including Prague, Brno, Ostrava, Olomouc, Karviná, Zlín, Mladá Boleslav.
Whilst official price maps exist, they are of limited value because the data used to create the maps can be inaccurate or incomplete. The market price appearing in a purchase contract [the source data for price maps] can easily be distorted. Whilst illegal, sellers are often motivated to decrease the property transfer tax payable at 3% of the higher of either the stated price of property or valuation. Then there is the problem of data used to draw up price maps being of insufficient quantity, where there are not sufficient property sales in an area for the comparative method of calculation [a method required to be used by valuation law] to be used as an effective guide.
Results of research
The real estate market and accessibility to property related information has undergone significant change since the Velvet revolution in 1989. Examples of improvement in quality of information are many and include:
- the introduction of an effective Information Cadastral System (ISKN) with possibility of the remote access via the Internet;
- fulfilment of economic, technical and legal conditions for joining the EU;
- the influx of foreign investors bringing modern methods to the market; and
- the adoption of standard procedures within the property market, which are common in other mature markets.
The degree of available information related to a property, its value and effective management available today is now voluminous. However, such information is rather complicated requires effort to collect, analyse and summarise for use by companies or individual citizens alike. The lack of summarised property data in sufficient quantity and quality has resulted in price values being distorted and incomplete resulting in continued speculation.
Despite improvement, being aware of all information pertaining to a property remains the only sure way to operate in this market.
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