The real estate business is collapsing rapidly, some brokers will lose their jobs

The real estate business is collapsing rapidly, some brokers will lose their jobs

Expensive real estate, rising interest rates, and the demand for cooling for owning a home. In an interview for SZ Byznys, František Kroupa, a real estate agent of the Archer reality, spoke about the changes that the real estate agency business is experiencing as a result of these changes.

“Anyone who brokered sales and rentals and didn’t do it correctly will be forced out of business. The quality of real estate agents really matters a lot at this point,” he says. “I expect another decline in dishonest real estate agencies, for which the next few months will be very painful,” adds Kroupa in the interview.

The real estate market of a year ago and the real estate market of today. Has it changed in your opinion?

Diametrically. The change took place when we started talking about a crisis. I noticed the first changes already last year, even though it was one of the most successful years in the history of the real estate industry since the revolution. The real estate market is mainly affected by two things. The first is the availability of money and economic peace. If I’m sure my employer won’t fire me because he could go bankrupt, then I can afford a lot of things, like thinking about buying a property.

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So what is happening in the real estate market today?

Demand and investors fell by nearly sixty percent. Last year it was very easy to sell real estate. A real estate agent placed an ad, which often responded to dozens of interested parties. Simply, whoever had a little money bought it. However, this is definitely not the case at the moment.

But I believe that this very change can have a positive impact on the real estate market, which is currently being cleaned up.

Those who have brokered sales and rentals and have not done so correctly will be forced to leave the business. At this point it will really depend a lot on the quality of the real estate agents and how they are able to sell.

Sara. I think about the end of those who have only half done this job, for example, they went around the house after work. I expect another decline in dishonest real estate agencies, for which the next few months will be very painful.

I also expect possible layoffs of real estate agents at large real estate offices and franchises. Some real estate agencies have hundreds of brokers, but they can’t make a living when there is little business.

Considering all these changes that have been absorbed by the real estate market in recent months, how does the business strategy of real estate agents change?

So far, real estate agents have sold, so to speak, internally. They had to get a property to sell and mainly presented themselves to the seller. Now they have to learn how to sell themselves to those who buy. This is a rather positive change from my point of view.

How to attract a potential customer today?

It is convenient to divide these strategies into marketing and business. Marketing today places an ad on the internet, which is simple. But the shop itself is forgotten. Today, long videos are made on a two-room apartment, drones fly there, which basically does not have the right sales effect.

If you make a movie or 3D photos, the person who decides if they would be interested in the property will always find something they will not like. He always feels like he’s been there before, and he won’t make it to the tour in the finale. And how do you want to do business with someone who doesn’t talk to you?

How do these changes, such as falling demand, rising interest rates, and more, affect the real estate sector? Do you think sales would decrease?

We are not yet at the end of the year, but I expect a decline of at least half this year. The main novelty is that the duration of the sale is extended, thus lengthening the time, it is not possible to manage so much and at the same time the sales are decreasing.

The main parameter is a well-performed operation and their number. But today it is decreasing considerably.

Luxurious and expensive apartments are currently being built and housing availability, especially in the capital, is not improving.

František Kroupa, Archer reality real estate agent

Is there a chance that demand will resume in the coming months?

As the market calms down again and interest rates begin to drop to a reasonable level, the market will gradually pick up again. Prices are relatively stagnant, although the tables show that the share of forced sales is on the rise.

Will the number of foreclosures increase, for example, due to rising mortgage prices?

I think it won’t be anything significant. A person who gets into financial trouble first sells things other than a roof over his head. However, we are currently seeing only a very slight increase in forced sales. But they are significantly more visible, mainly because the total number of sales made has decreased significantly compared to last year.

How will property prices continue to evolve? You mentioned that the market is currently rather stagnant. Will it be a long-term condition?

If the state starts building where possible, this could affect the prices of older properties. However, there is currently no indication on this. Luxurious and expensive apartments are currently being built and housing availability, especially in the capital, is not improving. This means that we will continue to have expensive properties.

At the same time, I don’t mean too expensive because the real estate sector behaves like other commodities and there is no real estate bubble. It is a free market. There are few of them, which is why they are sold at a high price. And the development will not improve.

In the long run, I don’t think prices will go down, but I’m not talking about the next couple of years. It may be that if the war continues and the economic situation worsens and interest rates continue to rise, prices may drop slightly.


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