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The price aspects of housing ( Prices ). Ing. David Slavata, Ph.D. Housing Economics. The kinds of prices in CZ. Market prices Cost prices Maximal prices Time direct prices Stop prices.
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Thepriceaspects of housing (Prices) Ing. David Slavata, Ph.D. HousingEconomics
Thekinds of prices in CZ • Market prices • Costprices • Maximalprices • Time direct prices • Stop prices
Most of prices in CZ are based on the market prices. Onlysupply and demanddeterminetheresultprice. • Example: Prices of flats, houses, land, carsetc. • Some of goods are underpriceregulation. • Most of flatrents are market based. • Some of rents are regulated.
Payments in Housing Owner of theflatpayments Rents Tenantpayments
Payementsforowner Payement = Flatexpences (house) + AadvancePayments Flatexpences (house) = repairs + tax + funds + land rent + administration + accounting + inspections + mortage Profit = Rent(reven.)-Costs (expences)
TenantPayements Payement = Net Rent + Advance Payments, Deposit Net rent = rent per m2 x area of flat + rent from facilities Advance Payements = water + gas + electricity + waste +….
Threekinds of determinantion Rent per m2 _______________________________ Adm. regulat. Cost Market Selected Cooperatives Others cities
Rent regulation P D S P1 P2a Q Qs Q1 Qd
Administrativeregulation • Traditionfrom 1914 in CZ • Expecting end 2013 in CZ • Housing list situation in 70s and 80s • Demotivatedforindividualactivity in thefield of construction • Biggerdemagethanfirst and second worldwar • Theownermustrespectthecharge set by thegovernment (low) • Disbalance in lowprotection
Typicalpoints of Czech rent regulation • Priceregulation • Legalregulation by civil code
Prices - overview • 1914-1918 rent regulation • 1918 – 1938 step by step deregulation • 1939 restoration of rent regulation • 1953 currencyreform in cz • 1964 new civil code - 2Kč/m2 • 1991 2Kč/m2 • 1992 4Kč/m2 • 1993 rent deregulationlaw • 1994 5,5Kč/m2 • 1995 6,76Kč/m2 • 1996 8,50Kč/m2 • 1997 12,70Kč/m2 • 1998 15,90Kč/m2 • 1999 17,39Kč/m2 • 2000 18,25Kč/m2 • 2001 18,98Kč/m2 • 2006 new rent deregulationlaw • 2010 60Kč/m2 • 2012 End of regulation 100Kč/m2
Disbalance in Legalregulation Civil code 1991 - 2005 • Lowor no possibility to give a notice to tenant (only by decision of thecourt) • In case of noticetheobligation to providecompensation (newflat) • Theownermustrespectedeven non payer • Familieswithchildrenwereuntachable • Ownermustrespecttheregulatedrents • No barriersfortenant – noticewithoutreasons
Impact of rent regulation in CZ • Latentshortage of flatsduring 100 years in CZ • Grayness • Inequity • Poorqualitybuildings • No efectivedistribution • No efectiveconstruction • Antagonisticclases – owners and tenants
Poorhouseholds • Subsidies • Municipalflats • Privatehostels • Receptioncentersforhomeless
Problem of increase of rentsafterderegulation in case of indefinitelyagreement • Agreementproposal to tenant • Twomonth term foracception of theproposal • In case of no acceptionthreemonths term for civil action • The rent isdeterminate by court on thelevel of market rent.
Determination of market rent by thecourt • The map of market rents • Expert statement • Submitting of minimalthreevalidagreementsfromthesame house by theowner • Submitting of paybillswhichdocumentsrepairing of flator house
Cost rent Tenant (shareholderof coop.) Paysthe rent Agreement Cooperative (owner of flat)
Cost rent Rent = mortage + Repairs + Administration + Insurance + Taxes + Rent of land + Last yearlossfromhousekeeping
Impact of cost rent in CZ housing • Wellmaintainedhousing fond in comparisonwithadministrativeregulatedhousesduringthe term of rent regulation • Relationship of coopmembers to their house
Market rent Rent = f (P, F, N, Sch,…..) • The rent isdeterminate by many kinds of factors.
Themainfactors • Place • Neighbourhood • Infrastructure • City transport • Services • Educations • Health care services • Public offices • Labour market • Population
previous Urban development in Ostrava
Themainchracteristics of thesituation • Theprices are affected by thefinancialcrise • The market systemafter 100 yearsisbalanced • Supply exceedsdemand • There are no possibilites to reachoversized profit • Balancedlawprotection of tenants and owners • Participation of privatesector on socialhousing (opportunityforenetrepreneures) • Highrate of flatreserves
Future of housing market • Therise of servicepricesconectedwithhousing (gas, electricity, water….) • New construct technology • Gethoproblems – concentration of poors • Vacantflats • Privatisation of statehousingstock • Changes in qualitystructure of tenants (partlyfinancialweakhoseholds) • Demography