Rus Articles Journal

Real estate of the Czech Republic. What was what will be?

the First crisis year remained in the history. Many frightening forecasts about a collapse of the European market remained horror stories. January, 2010 - time to sum up the results, to draw conclusions and to plan the future.

according to the Czech realtors, 2009 changed psychology of buyers of real estate. The understanding of “investment into real estate“ developed into confidence and more accurate planning of investments. Investors choose the apartments located closer to the downtown with good infrastructure, proximity of tram stops and the subway. History of 2009 showed that those who intelligently invested money in real estate with the purpose to lease housing make good money on crisis.

In parallel with it in the Czech market the powerful center of gravity of clients becomes

eko - housing. Demand for real estate with low power expense (the specific heat necessary for heating of the house, at most 50 (kW/m 2 ), increased for 50%.

One of the main points at making decision on purchase of this or that apartment in the secondary market.

All this

occurs against stagnation of the prices both on primary, and on secondary the markets. Expert of the Bonguard s company. r. o. Andrey Yadevich notes:“ The Czech market of real estate was stabilized. Within the last 3 months 2009 there was no decrease in average prices for apartments. In the secondary market of the price of panel houses dropped by 18 - 22%, on “brick“ from 5 to 10%. Developers are not able to lower the prices in new buildings too any more: and so sell the constructed objects on the verge of profitability. The market reached a bottom and now in many respects rates of its growth also depend only on bank community“.

the Similar situation develops also in the field of cottage construction. This segment suffered from crisis most of all. The prices dropped almost by 20 - 25%, in comparison with pre-crisis. Especially strongly those cottage new buildings which are located in more than 20 minutes of driving from Prague suffered.

Are in these hard times also obvious winners who not only won on sales volumes, but also became on the first place among popularity at buyers - the land plots with already available engineering networks. Biggest “losses“ in this segment only in the remote regions of the country where and before crisis it “was not prestigious“ to live and work. There the prices fall to 5% of the prices of 2008. In general over the country the price or remained at the same level, or gave insignificant growth. The last concerns lands in close proximity to Prague.

the Review of a condition of the market of real estate in Prague

of 87% of private investments of foreign citizens is the share

of the capital of the Czech Republic. With introduction in 2009 of the amendment to the legislation allowing to buy real estate in the Czech Republic to all foreign citizens without creation of the legal entity or conducting commercial activity in the country, investment appeal of real estate in Prague grew several times. It is worth making the reservation at once: purchase of real estate does not grant the right of full-time residence, for this purpose it is necessary to conduct commercial activity or to have a working visa. However it allows not only to own the apartment, the house or office in the country, but also to lease and get profit.

As the market of the Prague real estate of a sample of year 2009 looks?

to the Investor should understanding

that to see the actual cost where supply and demand find a balance point, it is from outside rather difficult for the person. Realtor offices and private sellers expose the offers on the market, proceeding from own interests in profit. Buyers look for option “cheap and very respectably“. The market finds “golden mean“ for that and others.

the Most desired apartments for investors in Prague are “garsonka“ (studio) and 1+ kk (kitchen in such apartments in a small recess), both in panel, and in brick houses. It should be noted that in Prague - 1 and Prague - 2 (historical districts of the city) there are no panel houses, and the cost of “garsonka“ in the center can be equated to the cost of the good two-room apartment in more remote areas.

the saying Is:“ Moscow not Russia“. And so areas Prague - 1 and Prague - 2 on the price category is not Prague. More true Prague, but prestigious and elite. As well as around the world, the most expensive apartments in this segment - sudiya and one-room as they are bought in most cases for investments and are leased then. On average for last 3 - 4 month of the left year the cost of such apartments decreased approximately by 10%. However if to subtract from calculations of the luxury apartment, transactions on which can be counted on fingers of one hand (as, for example, on Nerudov Street, under the walls of the Prague Hail), and to carry out correlation on “average apartments“ in these areas, then the falling price not so impresses - only 2 - 4%. And if to take into account and the fact that before Christmas and New year there comes “the slack season of sales“ as the consumer spends the most part of money for gifts, but not for real estate, then it is possible to draw a conclusion that that apartment which about New year was on sale for 2 million 500 thousand at the end of January, 2010 could leave the market 3 - 5% more expensively.

Not investment 2 - x or 4 - x room apartments which usually buy well-founded young families without children and with children can be noticed that the price in square meter in Prague - 1 grew almost by 10% in relation to fall of last year, and on Prague - the 2nd growth made about 3%. This results from the fact that on less dimensional apartments bought by investors, the price reached the limit, and when calculating profit on the subsequent leasing its growth becomes unattractive for buyers. While the apartments bought for accommodation of a family are not considered as investment, and it is rather as prestigious housing, emphasizing the status of owners.

If to take a detached view of the cost of the apartment of sellers, then it is possible to note that since Prague - 4 and further (i.e. behind historic center) fluctuation of cost of apartments is approximately in one range and can differ with appeal of infrastructure of areas only. Prague - 3 “got stuck“ in the situation “any more not elite and yet not the inhabitant“. That part which is located near Yirzhego`s subway with Podebrad still belongs to luxurious Vinogradam, and here from the subway the Flora and to “the good client“ is not recommended to buy further the apartment.

the Summary table of cost in kroner of square meter of housing in the secondary market of Prague (the end of 2009)

of < / tr>
1+ kk 1+1 2+ kk 2+1 3+ kk 3+1 4+ kk 4+1
Prague 1 104 163 104 161 118 981 94 570 114 228 99 861 104 561 75 966
Prague 2 98 930 71 248 90 489 81 449 80 670 81 907 95 030 87 559
Prague 3 73 706 55 610 57 272 60 063 73 786 48 591 75 799 79 622
Prague 4 57 582 52 183 51 272 46 635 50 239 38 549 53 224 38 494
Prague 5 62 787 48 986 59 789 52 349 60 789 46 486 66 128 51 831
Prague 6 66 098 54 258 64 864 52 090 67 219 56 254 64 745 67 021
Prague 7 68 355 50 938 60 064 51 296 59 858 57 982 66 298 64 664
Prague 8 59 718 44 999 57 842 46 236 62 747 40 146 63 689 49 287
Prague 9 56 408 47 290 51 980 45 165 51 101 43 030 48 639 41 679
Prague 10 62 422 51 903 59 677 47 449 66 375 46 765 69 796 43 329

of 26 kroner =1 euros

to the Average investor should pay the attention to Prague - 5 - the region of the subway Andel and space in a radius 5 - 10 minute driving the tram from it. For those who plan to buy the apartment for full-time residence it is possible to consider also more long distance where the secondary market gives way to new buildings. The district of Prague - 4, directly adjacent to Prague - is interesting 2 (Vinograda). Today this business heart business - Prague, and exactly here is located offices of many western companies.

the Buyer wishing to resell through a two-three of years the bought housing with profit has to pay attention to such districts of Prague as Modzhana, Mikhel, Zhizhkov, Carlin and streets near Budiyevitsk`s station.

If to speak about the apartment for full-time residence, then it is necessary to break dormitory areas into two categories: panel houses of times of socialism and new building. As we already spoke, at buyers houses of power category A, that is in which buildings consumption of energy on heating in the range 15 - 50 kWh/m 2 in a year enjoy special popularity. Most of developers to seek to hand over new objects with this certificate. Besides, the Prague new building strongly differs from the stone block where it is necessary to enclose still at least a half of cost of the apartment to lick housing “into shape“. The principle of the Prague developer - “buy the apartment and drive“. As a rule, all apartments are leased on a turn-key basis, i.e. do not demand additional repair. The buyer needs to buy furniture, or, at worst, kitchen furniture. In the worst as, buying the apartment at a construction stage, it is possible to choose own design of walls, floors, doors from the offered options that will already enter the standard price of housing, and option of kitchen. If the builder sells “naked kitchen“, then it is possible to order that brand of furniture which the buyer to liking and on finance that professionals were engaged in arrangement, and at the time of receiving keys to owners would only need to enter the main furniture and to enjoy life in own apartment.

What year 2010 prepares for us?

According to forecasts of analysts, primary market from - for crisis is obviously not in time behind reserved demand. Developers reached a bottom in reduction of prices. Apartments which still are in the market find the buyer, and here introduction of new projects is still frozen. By the end of 2010 there can be a situation when even in the conditions of crisis the increase in prices in primary market is possible. This assumption will become reality at once after introduction of eases by banks for receiving mortgage lending.

the Secondary market of 2010 in the first half of the year “will mark time“, showing insignificant fluctuations around the average price of square meter in 2 450 euros. And at ease of bank mortgage policy stable growth is expected. You should not forget that the law adopted in 2009 allowing foreigners to buy real estate in property is one more factor which will promote an increase in prices at an available mortgage. Now, at the beginning of a year, there are two options of development of the situation: or the market will remain in annual stagnation, or we will become witnesses of the coming increase in prices. Time will tell. Anyway worse will not be any more.