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.