Now the situation has changed. The city is experiencing a construction boom, and many lavishly furnished exclusive projects have appeared, including in the center. International companies are increasingly purchasing housing for their employees as property - it is more profitable. Wealthy Czechs have not only moved into new penthouses, but are also actively investing free funds in this market, buying two or three apartments, or even entire apartment buildings, which they then rent out. As a result, the luxury apartment rental market has become oversupplied, and rental profits have fallen by 20-70% in recent years.
The owners of 'top' properties have suffered especially. However, while losing rental income, homeowners in the center of Prague have simultaneously gained enormously in terms of the value of the housing itself. Renovated apartments in the Old Town (Stare Mesto), Lesser Town (Mala Strana), Vinohrady (Vinohrady), and Hradcany (Hrancany) have been increasing in price by 20-60% every twelve months since 2000. There is almost no free space for development; new housing projects are mostly renovations of existing mansions and architectural monuments. Demand for such exclusive housing is higher than ever, and it is obvious that new supply will be increasingly limited. In addition to the Czechs themselves, a large number of citizens of Western countries, where housing prices have long been at their peak and bank interest rates are unattractive, are looking for investment objects in old Prague. Every tenth buyer of real estate in the historic center is now a foreigner. Western Europeans are in a hurry to acquire updated antiques in Central Europe because they have something to compare with. Moreover, in six months Prague will become the geographical heart of the European Union.
Luxury housing is in this sense the most promising market segment: its growth potential is estimated at least five years, or even ten. That is, until the Czech capital catches up in this respect with Paris, Vienna, and Rome, where a price of 10,000 euros per square meter is considered normal. In Prague, on the other hand, the norm for the center is only 100,000 crowns (3,130 euros), with the maximum recorded record being 4,700-5,000 euros. According to some forecasts, in the coming years after EU accession, prices for Prague's exclusive properties will increase by 20%, and only by the end of the decade will growth slow to 10% per year.
Antique housing brought up to the highest standards enjoys the greatest demand. And it sometimes costs twice as much as in neighboring historic buildings of a more shabby appearance. Thus, an unrenovated two-room apartment (120 sq. m) in an old building without an elevator in the Prague 2 area (Vinohrady) can still be bought for 180,000 euros. Similar housing after a complete reconstruction of the building with replacement of engineering systems and installation of an elevator is already valued at 250,000-350,000 euros.
Many companies (including foreign ones) are engaged in buying up well-located mansions, bringing housing up to modern standards, and subsequently selling at a profit. They do not have to attract buyers with financial schemes. While in other price categories up to 70% of apartments are purchased through mortgages, elite housing in the center almost always sells for cash. Several addresses are often available directly in the Old Town. These are apartments from a single developer-restorer, no more than 15-20 in one building, finished with the most expensive materials. On the ground floor of the building there may be small shops, and above an attic - if the original architectural plan allows it.
Apartments in green areas, slightly more remote from the 'old place', where private houses were traditionally built (for example, Prague 4, 5), also have a reputation as good investment objects. Proximity to international schools, which is prestigious, also plays a role. Currently, many new grandiose villas are being built in the south and west of the city, among old cottages, by the efforts of their owners. Such a newly built house with three to five bedrooms will cost from 270,000 to 800,000 euros. However, from the point of view of growth in market value, luxurious apartments on the border with the center itself - so to speak, with a view of the Old Town - are more promising. You have almost all the geographical advantages of the latter, but at the same time there will surely be a park opposite the house - developers try to choose the best location.
In one of the new projects in Prague 5, a modern apartment in a luxury building at the construction stage can be purchased at a price of 2,000-3,000 euros per sq m. That is, it will not be cheaper than a separate cottage. However, exclusive apartment buildings (with several dozen apartments) have many advantages. These include service, security, and the center can be reached on foot from the construction sites if desired. Chic new housing in Prague is built not only for families. Here you can quite easily purchase an elite apartment formally belonging to the category of studios (i.e., without bedrooms), albeit of an impressive area - up to 80 sq m. As for interior arrangement, flexible layouts are now in fashion: all kinds of moving partitions, screens with which, depending on the mood, one large living room space is 'cut up'. Sometimes even bedrooms are only symbolically indicated, and the apartment is one large 350-400 square meter space with high ceilings, or even a 'second light'.
New elite apartments are good because they initially take into account all the requirements of a wealthy buyer. Besides location - the main pricing factor - these are large amounts of light, glass (for the wall facing the park), extensive terraces and balconies.