Czech Republic » Market Report

Throughout 2007, the cost of Czech residential property indicated amazingly solid capital increase. Gross revenue costs for apartments in Prague arose by 16.4%, with some fundamental localities establishing development more equal to 30%. External the capital of the country, the city with the most higher cost increase in the country was Ostrava. In Ostrava the change in an mean price per square meter go beyond 50%. The Czech business profited from continuously encouraging mortgage situation which showed the way to a nearly 24% boost in the figure of mortgages. 

User trust in the economic system, an increase in wages and a continuous need of supply added to this increase. Also, a particular push on values moved into the 4th quarter of the year due to purchasers seeking to buy before the VAT gain on some freshly built constructed property came into impression in January 2008.

Somewhat 43,000 homes were begun in 2007. The figure of dwelling portions finished was 41,650, 38% additional than in 2006, but still under the government’s new assessment which says 55,000 units are required annually to meet the requirement of the public. The most dynamic locality in terms of construction of new property was Stredocesky kraj and conventionally Prague, Brno and Ostrava were best within cities. 

From 1st of January 2007 a law came into effect that determine the step-by-step addition in and ultimately voiding of governed leases, a fifth of all the living accommodations collection is still matter of determined rents.

The enforced rent extended by 29% on average in 2007 and ought to fully enforce by the finish of 2011. An arising total of housing funds and the growing need of investment purchasers have contributed to a gain in plans suitable to neighbouring and worldwide buy–to–let financiers.

In general, capitalists are having gross leasing consents approximately 5% on usually. We can anticipate rents in Prague to stay reasonably stable the following year. With credit consequences coming upon central marketplaces overseas, developers, loaners and vendees are holding a keen eye on fundamental local market indexes to assure if the Czech Republic will endure a negative ripple consequence found in global market today. 

Nevertheless, the universal opinion is that with the accord of solid economical and contributing atmosphere in place, the market should stay firm during 2008 and into 2009.

International Property Brokers forecast that we will see steady growth in prices around the 10-20% per annum range for the next 2-3 years possibly falling to the 10-15% range by about 2009. Despite the rapid capital growth in the past, we still believe there is plenty of room for further steady growth well into the future.