Real estate prices in Divišova Quarter and Kamenná Quarter in Brno

Abstract

The paper focuses on the economic manifestations of gentrification and verifies the hypothesis of the existence of these manifestations in two Brno localities. The described research deals with the development of realized prices of houses in former distressed and workers' colonies/shanty towns. These colonies were established in Brno in the 1920s and 1930s and some of them have survived to this day.

Gentrification is the process of socio-cultural and economic transformation of a deprived locality. It is primarily a sociological phenomenon, where new residents, the so-called pioneers, come to the neighbourhood and start to change the locality both socially and culturally. The public starts to think more positively about the area and starts to visit it. This attractiveness often results in a new middle class moving into the neighbourhood, with a different lifestyle and demographic behavior than the original residents or pioneers. More demand for housing increases rents and the market value of properties, and so the area is changing economically as well.  It is commonly used to divide gentrification into four stages that have their own character traits. These features are used in the conclusion of the paper to time one of the locations into the gentrification process.

The first research site is the Divišova Qaurter, which is a former workers' colony in the cadastral area of Lesná. The sloping land on the northern edge of Brno was bought by several private individuals from among the workers employed in the nearby engineering plants and they built their houses there. From the beginning of the colony, the owners of the houses had private use of the land underneath them. The second research site is the Kamenná Quarter, which was established southwest of the centre of Brno as an shanty town with the knowledge of the city administration. The land was owned by the city of Brno and by private individuals who did not live in the colony. The original construction was often only in the basic formula of "kitchen + room" and the materials used for construction were scraps from nearby brickyards or leftovers from demolition sites.

The data for the research was obtained from purchase contracts from the archives of the Czech Office of Surveying and Cadastre, which contained price data. Subsequently, the data were processed into graph describing the number of transactions and into graphs describing the development of realised prices of houses from 1970 to 2020.

The economic manifestations of gentrification were monitored in terms of house prices and the number of transactions between 1970 and 2020. The number of transactions in both locations has been on a downward trend since the 1990s, and in the Kamenná Quarter this decline was preceded by a sharp increase. The development of property prices shows a clear beginning of the market economy with the end of the communist regime. In both localities, house price growth has moderated in the early 21st century, but has a continuous upward trend. These results point to the possible existence of gentrification in the Kamenná Quarter. In the Divišova Quarter, based on the evolution of property prices, the process of gentrification has not been demonstrated by this research.