In the Czech Republic, two common types of properties stand out for investment: panel buildings, and brick buildings. Both have advantages and drawbacks, making it essential for investors and tenants to understand the differences between these choices. In this article, we’ll delve into what panel buildings are, compare energy efficiencies of both types, outline the pros and cons, and ultimately aim to help you decide which type of property is right for you. What is a Panel Building? Panel buildings, referred to as ‘panelaks’ in Czech, are large housing complexes characterised by pre-fabricated concrete panels. They became prevalent in former Czechoslovakia during the mid-20th century as a response to the urgent need for affordable housing. Panelaks are typically high-rise structures with communal spaces. While they might be largely overlooked by expats, did you know that around a third of the Czech population lives in these flats? They typically offer a variety of apartment sizes, accommodating different family sizes, but the buildings themselves are usually quite similar. Comparing the Energy Efficiencies One of the crucial factors to consider when choosing between panelaks and brick buildings is energy efficiency. Panelaks generally have great thermal insulation as the concrete panels, when well-maintained, provide...
If you’re in the market for a luxury villa, you might be in luck as one of the country’s most expensive properties has gone up for sale. The luxury villa, owned by investor and mathematician Karel Janeček, is located in Prague’s Smichov district. According to the real estate agent Jan Bareš of NRG International Realty it boasts six bedrooms, four bathrooms, two studies, a pool, a hot tub, a wine cellar, a home theatre, and a rooftop terrace with stunning views of the city. It also has a garden area, multi-car garage, and guest and nanny accommodation. Janeček bought the villa in 2016 for 48 million CZK and worked with architect Radovan Mačák to renovate it to a high standard. He is selling it because he is moving to a larger property outside Prague. “I decided to sell the property mainly because of the need for a bigger garden around the house,” he recently told Forbes. The villa has a usable area of 719 square meters and the entire plot is 983 square meters. The price tag is 137 million CZK. If you look at the price per m2, it is really not that bad, at roughly 190k / m2....
Finally good news for those considering getting a mortgage: the Czech National Bank (CNB) is removing some restrictions from next month. Last week, CNB board members agreed to remove the DSTI (debt-service-to-income) restriction, which was introduced in April 2022 to slow the market. At the same time two other restrictions, DTI (debt-to-income) and LTV (loan-to-value) were introduced, but unlike DSTI, they will stay in place. The removal of the DSTI restriction will come into effect as of July, meaning the amount people can borrow would look as follows: What is the limit on what you can borrow now? Once the DSTI limit is removed, the maximum amount you could borrow for a mortgage will mainly be limited by the DTI ratio, which means you can borrow up to 9.5 times your annual net salary if you are 35 years old or younger. Those over the age of 36 can borrow 8.5 times. For example: A couple is applying for mortgage with a net monthly income of 50,000 CZK + 60,000 CZK. With the DSTI rule removed, they can now borrow 12.54m CZK. If they are older than 36, that would be 11.22m CZK. How did DSTI limit the above? With the DSTI restriction in place, you can only dedicate...
As a popular tourist destination, Prague has experienced a high demand for short-term rental accommodation options like Airbnb. Some people believe that owning a property for this purpose can be profitable, but it’s crucial to understand the business before diving in. This article will examine the advantages and challenges of owning an Airbnb property in Prague, based on real-life experiences and insights from Nick Marley, who manages over 40 Airbnb flats in the city. What’s the ideal property for Airbnb? To attract guests and secure bookings, your property should ideally have a comfortable size and a functional layout. Studio and one-bedroom apartments are popular choices, as they cater to solo travellers and couples. Properties with multiple bedrooms and kitchen areas can also be popular, especially with families and groups of friends, as that’s typically something hotels can’t offer. Location is key though, with apartments in or near popular tourist areas like Old Town, Mala Strana, and Vinohrady being highly sought after. The key is to get as close to the center as possible. You might be surprised to know the Žižkov area around like Husitska street or near Zizkov stadium does better than JZP, for example. How do you fit...
As I’ve written before, we’re entering a sweet spot in the property market where, finally, buyers have more power than I’ve seen in the 10 years I’ve done this job. It’s true mortgage rates are higher than they have been in a long time, but properties are sitting on the market longer and sellers can therefore be negotiated down on their asking prices. For a lot of people, purchasing the kind of property they want, whether that’s size, style, location, or other factors, can still be out of reach with the level of repayments needed. However, for those still wishing to get on the property ladder, there is another option: buy to rent. With many hopeful homebuyers being priced out of the market, they are renting longer, which is increasing demand for rental properties and therefore pushing up prices – more good news for people thinking to invest in a property to rent. In addition to the increasing rents, and adding to that sweet spot for investment, is the expectation that mortgage rates will come down in the future, property values will continue increasing. According to data from property developer Central Group late last year, the average rent gained on...
As someone who has been keeping an eye on the real estate market in the Czech Republic, I wasn’t as surprised as some to see a significant drop in apartment prices last year. This trend was particularly noticeable in older buildings, while the number of sales only decreased slightly for new constructions. However, the latest data from Valuo.cz, which analyses sales prices based on the land registry and advertisements, revealed that even high-priced areas around Prague’s metro stations are also experiencing price reductions, which to me wasn’t something I necessarily expected. When looking at properties around metro stations, Valuo compares renovated apartments in personal ownership with an area of eighty square meters located within a radius of one kilometre from the station, except for Letňany, where the radius is extended to 1.5 kilometres given the relative lower amount of properties close to the metro. Based on Valuo’s current analysis, it appears apartments near metro stations have become cheaper for the first time in the last six years. The average price has dropped for almost all stations compared to last year. The most significant decreases were seen at Bořislavka on line A (by 24%) and Národní trýda on line B (by 20%)....
You’re in a different country, with a culture you may not be overly familiar with, a language you don’t fully understand, and levels of bureaucracy that can be a nightmare to navigate. Is it really worth buying a property? This is a thought I hear from many clients and while buying property, especially your first property, can be an incredibly daunting task, it’s not so complicated as it might seem. After all, even Mount Everest can be conquered, all it takes is one step at a time. In this article, I will give you a quick overview of the steps involved in purchasing a property in the Czech Republic to help you navigate the process. Step One: Knowing what you want An obvious starting point maybe, but taking the time to figure out want you want can help make the rest of the process much more efficient. By this, I mean where you want to live, what kind of local amenities are important to you, whether a development project with a long lead time is right, or whether you want to buy an existing property. At the same time, it’s important to be considering your financing options and talking with...
As an expat, whether you’re planning to stay in the Czech Republic long-term or not, investing in property can be a good idea if you have the funds for it. In general, property is a relatively safe investment that will appreciate over time and can provide a steady income if rented out. Of course, property investment anywhere is not without its risks and in this article, I’m going to discuss some pros and cons of buying property in the Czech Republic as an expat. Let’s look at the pros first. Property prices vs average incomes of an Expat While properties in Prague can be expensive, as with any capital city, in general the cost of property throughout the Czech Republic compared to average expat salaries and the cost of living can be an attractive proposition compared to other countries such as France or the UK. While the Czech Republic doesn’t necessarily have a great ratio of income to property price (an average of 18 salaries for an average Prague flat), expats typically earn more than the average Czech salaries. Popular location for international businesses Thanks to its advantageous position in the centre of Europe and the relative lower cost of...
Are you tired of the Prague city lifestyle and ready for a change? Or perhaps you did your math and figured out that it will be much more efficient to live outside and commute to Prague, instead of paying the high property prices in the capital. Well, pack your bags and get ready to explore 15 decently sized cities (population of 10,000 or more), where it might be easier to achieve your property dream, yet still within a short commute to Prague’s city center. Pros and cons are included, as well as some personal tips. First of all – why consider living outside of Prague? Well, there are many reasons: 1. Money, Money, Money: Who doesn’t love saving a little extra cash? By living in a smaller city, you can enjoy a lower cost of living, including more affordable housing, food, and daily expenses. Just check sreality.cz for the cost of properties in the nearby cities and you might be pleasantly surprised so see what is possible there for purchase! 2. Shorter Commute: This handy infographic produced by Valuo.cz shows 15 cities from which you can get to the center of Prague in less than one hour by public transport....
The real estate market in the Czech Republic has seen a significant shift in the past year, with an increase in the number of properties available, and a downturn in both the number of properties sold and the volume of mortgages being taken out. This change has been driven by a number of factors, including economic uncertainty and changes in consumer preferences. In this article, we will take a closer look at the key takeaways from the real estate market in 2022 compared to 2021. Now, I’m a naturally curious person and as such, I’m constantly monitoring the market but even I was surprised to see the number of available property adverts on sreality.cz increased 100% year-on-year for both rental and purchase properties. You might be thinking this means there’s a lack of potential buyers out there, but it’s more to do with properties are sitting on the market longer. What I’m seeing though is not necessarily an aversion to buying, but rather people being cautious and keeping an eye on the market, waiting for the good deals. For example, January is normally the quietest month of the year in terms of the property market, but I’ve had a record...
The cooling of the real estate market is already visible and developers are suffering from the lowest number of inquiries in a decade. In a market like this, it is not uncommon that developers simply stop construction in order to save money, rather than building apartments and having them left empty, waiting for buyers. This is exactly the case of Central Group, one of the biggest development companies in the country, which is delaying building of 730 units by about a year. “We are reacting to the situation on the market. At a time when sales are slowing down by more than half, it is not efficient to build new apartments for storage. There is a bad mood and uncertainty, people are interested in apartments and are asking, but they are postponing purchases. Instead of sinking billions into the development, it is better to have them free for acquisitions,” explained by Dušan Kunovský, the owner and founder of the largest residential builder in the Czech Republic. They expect sales will go up again in about a year or in 2024, with the biggest deciding factor being the mortgage interest rates. “The turning point, which according to analysis, should bring a...
What is the worst that can happen when you purchase a property? You receive it in a worse state than you viewed it? Or the tenants don’t want to leave? Perhaps it’s incredibly loud neighbors? This is nothing compared to what (could have) happened to one of our clients earlier this year… Buckle your seatbelts, we are going to take you down the rabbit hole. But don’t worry too much, this one has a happy ending! This is the story of a young expat family expecting a baby. They were in a bit of a rush to purchase a property before the baby arrived, but still had plenty of time to search for the right apartment. After watching the market for a couple of months and viewing dozens of places, they finally found their dream property. The seller was a reputable company with a long track record and all went well… The viewing, the bank valuation, reservation, signing, and paying money. It all went well until the last part. You might already know that when you purchase a property the money usually goes to an escrow account – a third-party account that holds the money safe until you are the...
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