One of the most frequent questions we real estate agents receive, in various forms, is: “What will property prices be in half a year, a year, two years, or even five years?”
Providing an exact answer is almost impossible – the fair approach is to indicate the trend, which has been long-term growth, albeit with possible short-term fluctuations in either direction.

It is significantly easier than attempting to predict prices in the long run to determine the current selling or rental price. For us agents, this is easier today than several years ago, thanks to advanced software tools that allow us to set the market price with good accuracy – which is usually crucial for a successful transaction.

When setting a price, it is also of course necessary to apply a certain sense, developed through hundreds of valuations, along with sufficient knowledge of the local area. It is also desirable to have an overview of current listings on web portals. In any case, it is essential to work with current data on actual sales and not anchor to prices realized in the distant past (this can only be done if past prices are adjusted for the price developments in the given area and time period).

A mix of the above helps us correctly set the selling price or rental rate. The answer to the article’s title question is then simple – because the property will sell or rent faster and for the optimal price.

Faster, because if the price is set unrealistically high, it is almost certain that the property will not find its buyer or tenant at that price. The subsequent longer transaction process then costs the owner a considerable amount of money – there is the so-called time value of money. With today’s appreciation rates that experienced advisors at Stone & Belter typically achieve when handling free funds obtained from the sale of a property, the returns on these funds reach into the lower tens of thousands of CZK (approx. hundreds of €) per month (in the case of selling an average Prague apartment).

For the optimal price, because in a competitive market, few people buy at non-market prices, and asking prices in advertisements must therefore be as close to market prices as possible. Relying on a miraculous buyer willing to pay a completely non-market price usually does not pay off. In terms of real estate, we can also call today’s era the “era of comparison,” as even an ordinary buyer is capable of reliably verifying a property’s price from public sources.

Reducing an incorrectly set price may paradoxically no longer be attractive to buyers – not everyone wants to buy “discounted goods,” some lose interest, others may have already chosen a different property, or they may wait for another price cut. In a period of declining prices, setting the right price is even more important for the seller – the market price itself is decreasing, and those who are willing to pay amount XY today will, in a few weeks or months, be willing to pay perhaps 10% less.

It is similar with rental relationships – if the rent is set at a realistic level, the advertisement will attract a significantly larger number of applicants, among whom the real estate agency can more easily help the owner find the most suitable tenant for the property, while the entire transaction proceeds more quickly.

Therefore, when selling or renting a property, it pays off for owners to turn to a trusted real estate agency, for which determining selling prices and rental rates is daily practice.