Inflation and mortgage forecast in 2022


This year, the bank is celebrating its business success in history. The volumes of mortgages provided signal that banks will be able to negotiate mortgages worth more than 400 billion crowns.

According to CNB statistics, in the previous year 2020, banks arranged mortgages in the amount of 217 billion crowns.


The high demand for new mortgages was mainly due to lower interest rates. There was also interest in refinancing, when there was an effort to obtain lower interest rates for the next fixation period.


However, since October 2021, there has been a significant increase in interest rates.

Mortgage interest rates are expected to rise further, perhaps approaching the 5% mark next year due to inflation and changes in lending rates by the Czech National Bank (CNB). The average mortgage rate rose to 2.54 percent a year in October. Since March this year, the average interest rate on Czech mortgages has risen by 0.61 percentage point.




The forecast is that rates will gradually rise to over 4%, most likely to reach 5%.



Nevertheless, the year-on-year increase in the volume of new mortgages is starting to slow down compared to previous months. In August, the year-on-year increase in the volume of mortgages was more than 75 percent, but in September it was 38 percent and in October only 27 percent. Interest in the mortgage is gradually declining.




Availability of mortgages

Worse conditions for obtaining a mortgage lead to poorer availability of housing loans. The new limits will affect all mortgage applicants. Strict requirements will mainly apply to applicants under the age of 36. Many applicants will have no problem finding and obtaining a mortgage.



With rising energy prices, inflation is also rising. It accelerated to six percent year on year. We last recorded this high growth in 2008. Inflation is expected to reach as much as eight percent at the beginning of the year.





"Inflation will accelerate significantly in 2022 and will be one of the main macroeconomic problems. If, for example, the exemption or reduction of VAT on energy is not extended, we can expect a significant acceleration in annual price growth by more than eight percent at the beginning of the year. Single-digit inflation will still be a "positive result", said Jakub Seidler, chief economist at the Czech Banking Association.