What factors ensure demand for real estate in Prague
Experts predict that real estate in Prague will soon grow in price. The rent sector will make a good leap, and the rates for apartments may catch up with other European capitals.
Now Prague offers to rent housing about 70% cheaper than in Munich, options in Berlin and Vienna will cost 30% more expensive. Despite the fact that real estate in the Czech capital is still inferior in value to other European metropolitan areas, soon it will be able to significantly reduce the gap.
For several years, the real estate market in Prague was in decline. The yield from the commissioning of objects was declining. Last year it averaged 3.9, and in 2016 it was at 4.4%. Experts cite the increase in the price per square meter as the reason for this trend, although the increase did not significantly affect the interest of foreign investors in Czech real estate.
For the last 4 years apartments in new buildings in Prague rose in price by 80%, rent increased by 42%. Last year the price of housing increased by 18.6%. Now the price per square meter is at the level of 100 thousand crowns or 4 thousand euros. However, this year there is no such a big jump, the price in the market will gradually stabilize, which is not to say about rent. It has increased by 10% and there is a trend for further growth.
Mortgage helps to soften the increase in the cost of housing for the population. In 2016, its annual rate was fixed at 1.6-1.8%, but after a few years, the requirements for registration and the size of the rate have tightened. As a result, most Prague residents cannot afford to buy an apartment, and are forced to rent it.
According to statistics, 32% of the population rents housing in the Czech capital. This figure is considered small compared to other metropolitan areas of Europe. For example, in London, 49% of citizens rent real estate, in Amsterdam, Berlin and Hamburg – 70%.
The population of the Czech Republic is also growing. At the end of last year, it reached a record high for 70 years and amounted to 10.7 million people. In 2018 the growth was about 40 thousand people, and 97% of this number – are foreigners.
The Czech Republic is a convenient country for doing business. Many international corporations have opened their representative offices here, and specialists from different countries come to work in the Czech Republic. Due to this, the demand for rental real estate is growing, especially in Prague. Comfort class objects are the most popular.