"The Czech Republic was one of the few foreign countries where our compatriots invested their first capital back in the nineties of the last century. Buying real estate in the Czech Republic was very popular until the 2008 crisis. On the wave of Russian capital that poured there, real estate prices in this small Eastern European country then increased several times. However, now this direction has taken exactly the place it should occupy, based on the existing economic realities," says Anna Batizi, head of the foreign real estate department at Moscow Sotheby's International Realty.
Currently, according to the analytical portal GlobalPropertyGuide.com, the average cost per square meter of residential real estate in prestigious areas of the Czech capital is about 3,500 euros. According to Moscow Sotheby's International Realty, in prestigious areas the cost per square meter rarely exceeds 5,000 euros, in some cases the cost of premium-class properties is 10,000 euros per square meter.
According to Knight Frank, the average cost of quality properties in central areas on the primary market is 2,500 euros per square meter. Secondary market properties located in remote areas of Prague cost significantly less – about 1,600 euros per square meter.
In 2012, housing costs, according to Knight Frank estimates, decreased by 3%, in the first half of 2013 – by another 0.3%. At the same time, as experts of the company believe, compared to other cities of the Czech Republic, Prague is characterized by greater stability and even shows a slight positive trend since the beginning of 2012 – about 5% over this period.
In the near future, experts predict a continuation of positive trends – a gradual recovery of the market and a smooth increase in prices associated with pan-European economic processes.
"The pace of new construction in Prague has also slowed down. In the current 2013, 10% fewer new facilities were commissioned compared to the same period last year. Small and medium-sized projects with less than 100 apartments are the most common. At the same time, over the next three years, the government plans to sell more than 4,000 apartments owned by the city. In this way, local authorities hope to raise about 158 million euros," says Olga Yasko, Director of Research and Analytics at Knight Frank Russia & CIS.
"Prices in this market are stagnating. This is not least due to the fact that little good new housing is being built. The volume of new construction is comparable to 1997. This negatively affects demand. There are not many prerequisites for a sharp change in the situation towards growth yet," believes Anna Batizi.
According to the analytical portal GlobalPropertyGuide.com, the yield from renting out apartments in Prague is 3.38-4.51% per annum. For example, the cost of an apartment with an area of 50 square meters is about 187,000 euros, rent – 700 euros per month. An apartment with an area of 85 square meters can be bought for 312,000 euros, rented for 1,000 euros per month. The price of an apartment with an area of 120 square meters will be 410,000 euros, rent – about 1,300 euros per month.
"Although the Czech Republic and its capital are quiet, calm places for a pleasant and comfortable living, the economic situation in the country is not so optimistic – the effects of the 2008 crisis are taking their toll, and the Czechs cannot hope for an exit from the protracted crisis anytime soon. In this regard, the interest of foreign investors in real estate, which was not too active before, has fallen.
Those who have real estate in Prague cannot count on selling it for decent money. This is also due to the fact that almost 90% of the local population of the Czech Republic live in old houses with a fixed rental rate tied to the footage, city, district and operating costs, which makes the rental price for locals lower than for foreigners and those who live in houses built after 1993," says Igor Indriksons.