Property developers and recently also banks and mortgage brokers have begun implementing incentives in an attempt to jump-start the weak housing market.
Three months ago, Quinlan Private Golub (QPG) announced that it would cover the SichrJob mortgage insurance for clients who purchased an apartment in QPG’s Mod?anský Háj residential project in Prague 12–Mod?any. Since then, five more developers including BCD Group have teamed up with Czech mortgage broker Hyposervis to offer the product. According to Czech Business Weekly (CBW), six developers currently cover the insurance for the client who buys a home in one of their selected residential projects. SichrJob is a mortgage payment protection insurance offered in cooperation with insurer Uniqa pojiš?ovna; it also includes involuntary termination of employment, among other things.
More efficient than cars
While in spring would-be buyers anticipated property prices to further fall, since June the main reason for delayed home purchases is different. “People have reduced their interest in the purchase of new apartments mainly because of their increased concern that if they take out a mortgage to purchase a new apartment, they won’t be able to pay it in the event of job loss,” said for CBW Milan Ro?ek, Hyposervis’ chairman of the executive board. This type of mortgage insurance is more efficient than incentives such as cars and kitchens, Hyposervis said. The insurance paid by the developer for the first three years, based on a K? 3 million (€115,000) mortgage, will equal K? 85,000 to K? 120,000.
SichrJob is available for those who buy apartments and houses in selected new residential projects, currently some 400 units in seven residential projects.
Out of the 122 units planned for the first stage of Mod?anský Háj, which is currently under construction, 22 units are pre-sold, QPG said. Seven of the 22 pre-sold units were booked since the end of June when QPG began offering SichrJob, however, not all of the clients took out a mortgage through Hyposervis and some clients even paid cash, QPG’s sales and marketing manager Lenka Tu?ková told CBW.
