Increased demand for real estate has driven up prices for Prague apartments
According to an analysis by the real estate agency Lekvi Group, important factors for clients from Eastern European countries interested in purchasing real estate are the economic stability and high level of security in the Czech Republic, which guarantees profitability and reliability of investments. Buyers also highly appreciate the quality of new residential projects in the country.
The national composition of investors in Czech real estate has remained almost unchanged in recent years. The only thing that changed after overcoming the economic crisis is that the relative share of foreign buyers of residential real estate on the Czech market has decreased, as Czechs themselves have focused more on it.
"Over the past ten years, 70% of foreign buyers were Russians and Ukrainians. However, it is already known that Belarusians, Azerbaijanis, and recently also investors from China and Israel often become owners of Czech real estate," Firaz Muinov, executive director of Lekvi Group, informed in an interview with Právo.
According to the expert, during the financial crisis, foreigners owned 30% of all apartments and houses of the total real estate in the country. After the crisis, Czechs took advantage of the improved overall economic situation and low mortgage interest rates to purchase their own housing.
According to Karel Bartoš, an employee of Lekvi Group, in past years foreign buyers were primarily interested in large apartments (in the high price segment), but currently demand for them has decreased by 50%. Most clients are interested in purchasing small apartments and commercial real estate. "We assume that real estate will be attractive in this regard in the future, also considering the boom in short-term rental of residential premises and online services like Airbnb," Karel Bartoš believes.
Apartments in Prague have become 15% more expensive
According to Radio Prague, the average price of new apartments in Prague in the first half of 2017, year-on-year, increased by 15%. Currently, the cost of 1 square meter of new living space is 75,791 crowns (about 2,915 euros). The total number of apartments sold in Prague decreased by 15% in the first half of 2017.
Statistical data on this were published by development companies Trigema, Skanska Reality, and Central Group. The Prague housing market currently experiences a serious shortage of new apartments, which is driving up prices.