The central bank has already started to cut interest rates. For those who need to finance their homes and are looking for cheaper mortgages, this is good news. Banks will respond to the rate cuts and mortgage rates will gradually go down due to their competition with each other.
Inflation had finally fallen into the Czech National Bank's tolerance band and was approaching the 2% inflation target. After many troubled months, this serious macroeconomic imbalance seems to have been brought back to normal. This is positive news for the economy, as the depreciation of the currency, earnings and savings is one of the biggest dangers to the economy.
The necessary tax for reducing inflation is a mild economic slowdown, without which inflation has never fallen in history. Without the use of monetary instruments, including rising interest rates, the fight against inflation would be disproportionately longer and more painful. Now it is possible to start focusing again on getting the inflation-fighting economy back on track.
The central bank has already started to cut interest rates. Most recently at its February meeting by 0.5 percentage point to 6.25 %. This is good news for those who need to finance their homes and are looking for cheaper mortgages. Banks will respond to the rate cuts and mortgage rates will gradually go down due to their competition with each other. Indeed, this is already happening.
I am convinced that the popularity that owner-occupied housing enjoys among Czech citizens is an expression of their desire to have their own lives under control, to provide for their old age, that it is an expression of their responsibility to their own lives and the lives of their families. The state should not throw unnecessary regulations under the feet of citizens who want to rely on themselves. On the contrary, it should support it as much as possible.
Ideally, from my point of view, the state should therefore try to create conditions so that as many people as possible can live in their own homes. After all, having one's own home is an important part of providing for old age, when the costs associated with rent can mean significant hits to some elderly people's budgets. And having your own property is the primary and best insurance against emergencies that can befall anyone. Property values are continually increasing.
For these reasons, home ownership is one of the main topics that I have been working on in the Chamber of Deputies for a long time. Despite the strained state of public finances, for example, we managed to push for and then defend the retention of tax deductions for interest on mortgage loans, thanks to which citizens can reduce their tax base. We also managed to exert pressure in the last period, which led to the abolition of the property tax. In the past year, I advocated for the abolition and relaxation of certain credit indicators that reduced the affordability of mortgages such as the DSTI, which was also eventually abolished by the CBN Board and the mortgage market began to recover as a result before the rate cuts.
Most recently, the House of Commons approved my two amendments that will make the early repayment fee apply only to new contracts or new fixings. That is, not to those clients who fixed their mortgage this year and last year, when interest rates were at their highest. The second change adopted concerned the limitation of the amount of the fee. The fee will be 0.25 % for each year until the end of the fixation, up to a maximum of 1 % compared to the originally proposed 2 %. Thus, for example, two years before the end of the fixation it will be 0.5 %. But having rules like this was a prerequisite to not end the supply of fixed mortgages, which bring some stability to those financing their own home.
These are all steps that aim to enable as many citizens and families as possible to achieve their own housing and take their lives into their own hands. I am glad to see that the mortgage market is getting a boost as inflation and interest rates come down, and that housing finance will become more affordable. But there are two sides to every coin, a recovery in demand for own housing at a time of limited supply will have an impact on property prices. Which is the main challenge for the Ministry of Regional Development, which should be more concerned with expanding supply than with wild ideas for regulating existing supply, which is actually true for rental housing as well.
I will continue to work to ensure that this is the case. And that the administration does not throw sticks under the feet of citizens who want to live in their own.
blog Vojtěch Munzar - Member of the Parliament of the Czech Republic
gnews.cz-JaV_07
https://www.blogosvet.cz/article/trh-hypotek-a-jeho-oziveni-lzW02?utm_source=echo24_hp
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