News: Czech Republic

News in this section

• European property investment shows year-on-year increase
• Property In The Czech Republic
• Czech Home Starts up 7.5%

European property investment shows year on year increase

CBRE Review

21 January 2008

Despite the weaker fourth quarter, the high levels of investment activity in the first three quarters resulted in another record year at €236 billion. Most European markets showed a year-on-year increase in turnover.

Overall CEE investment volume did not change significantly compared to the €12.5 bln reported last year. The picture is, however, very diverse. While Russia and Poland saw a drop in investment turnover, the Czech Republic and Hungary experienced a record year. €2.8 bln turnover was reported from the Czech Republic, which was the highest figure among CEE countries with a remarkable annual growth of 70% vs. 2006.

According to Margaréta Mészaros, Head of Investment and Valuation at CB Richard Elllis in Budapest: “Hungary remained the 3rd ranked CEE country in terms of overall investment volume since 2000.” Poland has attracted by far the biggest volume (over €12.3 bln), followed by the Czech Republic (€7.9 bln).

Property In The Czech Republic

The Guardian

17 October 2007

Thanks to its many native sons the Czech Republic is synonymous with the world of art, literature and science – from Dvorak and Freud to Kafka and Kundera. The Republic is also home to Prague, one of the most picturesque urban landscapes in all of Europe and a popular location with western film crews (Daniel Craig’s James Bond comes to mind).

But the country has not always been so welcoming. The shift from a closed Soviet-style society to an open democracy began with the Velvet Revolution in 1989. Notwithstanding teething problems – and following accession to the European Union in 2004 – nowadays the Czech Republic is at the economic forefront of Europe’s emerging markets. Although in its infancy, the country’s residential property sector is meeting the new free market challenge with aplomb.

Following its creation, the Republic was deemed by the World Bank to be the most successful transition economy in central and eastern Europe. By 1997 the so-called ‘Czech miracle’ had ended, but between 2002 and 2005 annual GDP growth rose from almost 2% to 6%. Today GDP growth is 6.1%.

With per capita income just over $11,000, the Czech Republic has one of the highest income levels among the new EU member states. ‘Despite a broadly favourable economic performance, long-term employment remains high,’ reports the World Bank.

In the build-up to EU entry, there was a lot of property activity. ‘Post accession, the market has levelled out considerably,’ says Gareth Williams, senior research analyst at Knight Frank. ‘As one of the most affluent ex-Soviet Bloc states, the Czech Republic is today a gateway from the west to the second wave of eastern European countries.’ Relative to western Europe, property prices remain affordable.

EU membership brought the right of individual property ownership to EU citizens. Residents of non-EU countries can’t normally buy property in the Czech Republic unless a limited liability company, an SRO, is formed.

What you pay for a property is obviously location-dependent. ‘The price for a new-build, grade A property in Prague is around €3,000 per square metre,’ says Williams. Prices for properties of a comparable size in the suburbs are about 25% lower. The most expensive apartments are to be found in the Malá Strana area of Prague – the baroque area at the bottom of the hill below the castle, where you can expect to pay around €3,800 per sq m, with prices for exceptional properties exceeding €6,000. At the lower end of the scale, reports Knight Frank, a three bedroom unit in the city suburbs will cost upwards of €500 per sq m.

In the country’s second-largest city, Brno, prices range between €220 and €1,500 per sq m (and sometimes higher). The average price increase in Brno during 2006 was 18%, while another location significantly above national average rates was Ostrava. Prague saw residential property price growth of just under 13%.

Czech Home Starts Up 7.5% In Q3 07

CTK Czech News Agency

November 9th 2007

Czech home starts grew by 7.5 percent year-on-year to 12,580 new homes under construction in the third quarter of the year, the Czech Statistical Office said today.

Builders completed 8,731 flats, 44.3 percent more year-on-year. A total of 176,817 homes were under construction, 4.7 percent more year-on-year.

The growth in housing construction was due to a favourable situation on the market for home-building savings and mortgages, and to a planned increase in value-added tax on housing construction.

"The Local Development Ministry said banks signed 59,550 mortgage loans on housing with principal worth Kc113.090 billion in the third quarter," statisticians said. In full-year 2006, statisticians registered 62,953 mortgage loans worth a total of Kc115.119 billion.

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