The real estate market in the Czech Republic
Koutris Efstratios, Monday, 27 January 2014
This article is part of a series of 8 articles about buying property in the Czech Republic. The other articles in the series cover the following topics:
Introduction
One of the most essential aspects, when buying a property in a foreign country, is to compare the present conditions in each prospective location, and decide whether your investment will be lucrative not only for your wallet but also for your personal needs. When it comes to selecting a country to invest in a real estate property, Czech Republic is an extremely attractive and popular destination. But which exactly region of Czech Republic is the best to buy property? The answer to this is partially subjective and partially objective. All depends on the investor’s preferences and taste. However, and above all, this answer is biased by whether the buyer wants to financially exploit this property or simply wants to use it as a place to live. Therefore, the following lines will unfold the principle reasons that would convince every prospective investor to buy property in Czech Republic. Furthermore, this article will focus on the most popular places that foreigners prefer both in Prague and in CR, while noting the regions that are cheap, yet attractive options.
Why should you buy property in the Czech Republic?
There is a plethora of arguments that can easily support the decision for a potential financial investment in Czech Republic, regardless of whether the real estate is purchased in order to be used as ‘buy to let’ or as temporary/permanent living quarters. First of all, Czech Republic is strategically located in the heart of the European Union and can be considered as the nexus between Eastern and Western Europe; in other words it is located at the ‘heart of the largest free market trading block in the planet’ which ensures easy access. Despite the fact that its near neighbors include Germany and Austria, the real estate prices, together with the actual cost of living, are still kept at very low prices (especially the further you live from Prague). The average apartment price is CZK 1,747,244 (€ 69,478). Furthermore, CR is currently a country with high standards of living, high education, very competitive infrastructure, an extremely developed real estate market, and an economy that was/is mildly affected by the general European crisis. Perhaps, this can be associated with the fact that CR has not adopted the euro as its currency. And since we are referring to the Czech economy, it needs to be highlighted that Czech banks, or in general banks that are activated in CR, offer very low interest rates, thus fueling and propelling foreign investments on real estates in Czech Republic (the average mortgage interest rate in June 2012 was 2.95 % (currently, it is 3.17 %)). An additional reason is that since 2009 CR had to comply with the EU directive (article 56 of the EU articles of establishment) with respect to the purchase of real estates by foreigners. Therefore, the whole process of buying a real estate is no longer time-consuming. Finally, an additional basic reason for someone to invest in CR is that this is a very beautiful country which combines historical elements dressed with glamor and beautiful landscapes.
Popular and cheap regions in CR
Czech Republic is divided into two main regions, each one of them with different cultural elements and influences: Bohemia and Moravia. In either case, there are two essential aspects to consider when buying a property: location and working possibilities. Prague is undoubtedly the most popular target for foreign investments. It is one of the most dynamic and attractive cities in the world, with areas, such as the historic center and the area around the Prague castle (Prague 1), that are dominated by classic buildings. It is extremely safe to say that these buildings will never lose their value; quite on the contrary, the investment will be extremely lucrative on the long-term. Nevertheless, the most expensive average housing price is found in Prague 2 (€ 195.000 which is heavily populated by foreigners. Furthermore, areas such as Zizkov (Prague 3, the student area), or Holesovice (Prague 7) are located close to the center but they are relatively cheap to purchase. On the other hand, areas such as Dejvice (Prague 6) are also close to the center, very beautiful, yet quite expensive. It needs to be mentioned that Prague is a rapidly expanding city and the respective transportation from areas that 10 or 20 years ago would be considered as suburbs, is now extremely fast and frequent. Hence, an investment in areas where the Prague metro is going to expand in the next years, can be definitely considered as target areas for investments (real estates are still cheap). In general, the further away we go from the center (Prague 1 and 2) the cheaper the property.
A real estate investment in Prague, unless it is used for personal use, is a long-term investment (no immediate gain). However, there are regions in CR where there are extremely lucrative opportunities; regions that are cheap but attractive to buy. For instance, the capital of Moravia, Brno. Brno, is a rapidly expanding city with a highly industrial and education sector, and great touristic attractions. Brno is bound to be a forthcoming business hub, hence real estate investments should be regarded as a profitable deal. Furthermore, there are many foreigners that currently live in Brno and typical prices for a property are around €76.000 – 1.700.000. Moreover, further interesting locations in Czech Republic, where cheap real estates can be purchased, include cities such as Hradec Kralove (a beautiful university town which is located only 1 hour from Prague), Ostrava and Plzen.
This article is part of a series of 8 articles about buying property in the Czech Republic. The other articles in the series cover the following topics:
Introduction
One of the most essential aspects, when buying a property in a foreign country, is to compare the present conditions in each prospective location, and decide whether your investment will be lucrative not only for your wallet but also for your personal needs. When it comes to selecting a country to invest in a real estate property, Czech Republic is an extremely attractive and popular destination. But which exactly region of Czech Republic is the best to buy property? The answer to this is partially subjective and partially objective. All depends on the investor’s preferences and taste. However, and above all, this answer is biased by whether the buyer wants to financially exploit this property or simply wants to use it as a place to live. Therefore, the following lines will unfold the principle reasons that would convince every prospective investor to buy property in Czech Republic. Furthermore, this article will focus on the most popular places that foreigners prefer both in Prague and in CR, while noting the regions that are cheap, yet attractive options.
Why should you buy property in the Czech Republic?
There is a plethora of arguments that can easily support the decision for a potential financial investment in Czech Republic, regardless of whether the real estate is purchased in order to be used as ‘buy to let’ or as temporary/permanent living quarters. First of all, Czech Republic is strategically located in the heart of the European Union and can be considered as the nexus between Eastern and Western Europe; in other words it is located at the ‘heart of the largest free market trading block in the planet’ which ensures easy access. Despite the fact that its near neighbors include Germany and Austria, the real estate prices, together with the actual cost of living, are still kept at very low prices (especially the further you live from Prague). The average apartment price is CZK 1,747,244 (€ 69,478). Furthermore, CR is currently a country with high standards of living, high education, very competitive infrastructure, an extremely developed real estate market, and an economy that was/is mildly affected by the general European crisis. Perhaps, this can be associated with the fact that CR has not adopted the euro as its currency. And since we are referring to the Czech economy, it needs to be highlighted that Czech banks, or in general banks that are activated in CR, offer very low interest rates, thus fueling and propelling foreign investments on real estates in Czech Republic (the average mortgage interest rate in June 2012 was 2.95 % (currently, it is 3.17 %)). An additional reason is that since 2009 CR had to comply with the EU directive (article 56 of the EU articles of establishment) with respect to the purchase of real estates by foreigners. Therefore, the whole process of buying a real estate is no longer time-consuming. Finally, an additional basic reason for someone to invest in CR is that this is a very beautiful country which combines historical elements dressed with glamor and beautiful landscapes.
Popular and cheap regions in CR
Czech Republic is divided into two main regions, each one of them with different cultural elements and influences: Bohemia and Moravia. In either case, there are two essential aspects to consider when buying a property: location and working possibilities. Prague is undoubtedly the most popular target for foreign investments. It is one of the most dynamic and attractive cities in the world, with areas, such as the historic center and the area around the Prague castle (Prague 1), that are dominated by classic buildings. It is extremely safe to say that these buildings will never lose their value; quite on the contrary, the investment will be extremely lucrative on the long-term. Nevertheless, the most expensive average housing price is found in Prague 2 (€ 195.000 which is heavily populated by foreigners. Furthermore, areas such as Zizkov (Prague 3, the student area), or Holesovice (Prague 7) are located close to the center but they are relatively cheap to purchase. On the other hand, areas such as Dejvice (Prague 6) are also close to the center, very beautiful, yet quite expensive. It needs to be mentioned that Prague is a rapidly expanding city and the respective transportation from areas that 10 or 20 years ago would be considered as suburbs, is now extremely fast and frequent. Hence, an investment in areas where the Prague metro is going to expand in the next years, can be definitely considered as target areas for investments (real estates are still cheap). In general, the further away we go from the center (Prague 1 and 2) the cheaper the property.
A real estate investment in Prague, unless it is used for personal use, is a long-term investment (no immediate gain). However, there are regions in CR where there are extremely lucrative opportunities; regions that are cheap but attractive to buy. For instance, the capital of Moravia, Brno. Brno, is a rapidly expanding city with a highly industrial and education sector, and great touristic attractions. Brno is bound to be a forthcoming business hub, hence real estate investments should be regarded as a profitable deal. Furthermore, there are many foreigners that currently live in Brno and typical prices for a property are around €76.000 – 1.700.000. Moreover, further interesting locations in Czech Republic, where cheap real estates can be purchased, include cities such as Hradec Kralove (a beautiful university town which is located only 1 hour from Prague), Ostrava and Plzen.
All types of property for sale in the Czech Republic by private sellers and estate agents. Find your perfect house or apartment in Bohemia, Moravia, Prague, Hradec Kralove, Ostrava or Plzen
It is extremely important to know beforehand that the actual purchase price of a real estate is only part of the final cost. In fact this final cost
can be ultimately raised up to 6 – 8 % of the property’s value once additional fees relevant to legal and registration costs or the real estate’s agent
commission are to be considered. Therefore, this article effectively provides an overview of the total costs that a prospective buyer or seller needs
to spend in order to finalise his/her inve
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