Since the Czech Republic’s accession to the EU in May 2004, it has experienced a surge in foreign investment. As of 2007, the question remains: is the Czech Republic still a viable market for investment property?
According to data from the Czech Statistical Office for the first half of 2007, the Czech Republic’s economy was thriving, with overall economic confidence reaching a record high in August. This robust economic climate is coupled with increased consumer spending, a boon for the property market and investors looking to purchase property.
Prague, easily accessible with frequent, low-cost flights, attracts the majority of investment. Apartment prices in Prague have been increasing at approximately 20% annually, with gross rental yields hovering around 7.5% to 8.5%. The average investor has been allocating around £150,000 for investment properties in Prague’s prime districts (1 to 5). However, the city offers options for various budgets, ranging from £30,000 to hundreds of thousands of pounds. PragueProperty4Less features five city developments with apartments priced between £39,200 and £250,000. They anticipate a capital appreciation exceeding 10% per year for the subsequent five years.
For investors seeking affordable buy-to-let opportunities, new properties are becoming available in Brno, the Czech Republic’s second-largest city. Property prices in Brno are approximately two-thirds of those in Prague. Bolstered by the strengthening economy, Brno has undergone significant regeneration. Several projects are in progress, including two city center developments offering units starting at £28,000 and £39,500, both slated for completion in Spring 2008. Additionally, a family-oriented development, complete with a playground and pond, offers units from £30,000, expected to be finished in 2009.
While Prague remains a popular choice, investment opportunities in world-class golf and ski resorts outside the capital are also noteworthy. The Obora Golf Village at the Monachus Golf Resort presents an attractive option. Available units include bungalows priced from £146,200 to £212,200 and villas ranging from £171,700 to £228,400. Alternatively, consider investing in the flourishing ski resorts of the Krkonose region, also known as the Giant Mountains. Near the ski lifts in Rokytnice nad Jizerou, apartments are available from £51,000 to £65,000. A variety of properties are also available in the Giant Mountain resorts of Svoboda nad Upou and Harrachov, as well as in the family-friendly Sumava region.
The Czech Republic’s strong economic growth has fueled substantial regeneration projects across the country, providing investors with an expanded range of choices. Central Bohemia, located 30km southwest of Prague, is one such area. In the town of Beroun, property values have increased by 20% for those who invested the previous year. ‘The Bakery’, a modern refurbishment of a former bakery in the northwest of Beroun, currently offers 38 units priced from £20,000, with completion scheduled for September. Trojans International, an Enfield-based company, is managing this development.
In conclusion, continued regeneration and economic prosperity suggest that the Czech Republic remains a compelling market for investment property.