Architectural styles in Prague: a guide for investors in historical properties in Prague

posted 17 Jun 2020, 05:55 by Conbiz Info Center   [ updated 18 Jun 2020, 03:22 ]

Architectural styles in Prague: a guide for investors in historical properties in Prague 

One of the things which makes Prague into a leading real estate investment site is its architecture. In fact, Prague can also be called "a world architectural treasure" without any exaggeration. Unlike other cities, where one can usually see one or two dominant architectural styles, in Prague one can be wowed by all of the central historical architectural styles in Europe: Romanesque, Gothic, Baroque, Art Nouveau and many others. And if this is not enough, Prague has several architectural styles that developed into specific sub-styles that cannot be found anywhere else (for example, Czech Rondo Cubism, also known as Czech Art Deco). These architectural styles are expressed both in residential buildings and commercial buildings.

In order to avoid boring you, we will explain this complex topic to you in a manner which will be easy to digest and understand. To do so, we have tried to make this guide an enjoyable and example packed text as possible. So let's leave on a short chronologically – historically ordered tour in everything art afficionados might find to be of interest in Prague. We will start off with 1000-year-old architecture and conclude with fascinating contemporary architectural projects.

Romanesque architecture in Prague: the story of the cannonball in the wall

Romanesque architecture was inspired by the ancient Roman architecture and was typical of 11th to 13th century European architecture. The typical Romanesque structure had thick walls, thin windows, tall towers and massive supporting pillars. A famous example of Romanesque architecture in Prague is the Rotunda sv. Martina in the Vyšehrad fortress Park. this Rotunda structure is the most ancient of its type to be preserved and is beautifully set off on the background of the lovely scenery of Vyšehrad Park. When you are near it seek out the cannonball imprinted at the front of the building.


Another type of rotunda structure is the Rotunda of the Discovery of the Holy Cross (Rotunda Nalezení sv. Kříže). What makes this structure so fascinating is not only its own beauty, but also the completely different architecture surrounding it – as if it had been forgotten in place (or as if it belonged to another place and time).


Gothic architecture in Prague: the kind you can’t miss

The gothic style, which originated in France, dominated European architecture between the 13th and 16th century. You should definitely visit some of Prague's spectacular Gothic cathedrals. As soon as you enter, imagine that you are medieval residents of Prague, standing in awe before the glory of the kingdom of heaven. That effect is, of course, precisely the underlying premise of the gothic style cathedrals – to get the Christian faithful to feel 'small' compared to the power of Jesus and the Christian Church.

  • There are two cathedrals you won’t be able to miss in any event, given their location in Prague's tourist center- the Prague Castle and the old city square:
  • The Cathedral of Saint Vitus, located in the Castle of Prague, the Church of our Lady before Tyn (Tyn Cathedral) located in the old city square of Prague.

Renaissance in Prague: let's play ancient tennis!

Renaissance architects mostly sought to revive the classic architecture of ancient Greece and the Roman Empire. The renaissance period of Prague is dated between the 15th and 17th centuries. An unforgettable element of the Renaissance architecture is Sgrafitto, a method similar to wall painting (fresco). One can find an incredible example of this in the Míčovna building, when one wanders through the beautiful royal gardens near the Prague Castle in the Hradčany Prague Quarter  (The Castle Quarter). The meaning of the name Míčovna is banquet hall. This hall was used as a sort of sports hall for the nobility, where they played an ancient version of tennis.

That famous Prague Baroque

The first association people have in regard to Baroque is that of angelic cherubim with plump bellies and chubby hands, who cavort and play on the columns of churches. For architecture neophytes, Baroque is often the most recognizable style. Baroque in architecture is very intense, it makes use of many decorations, dramatic décor, colorfulness and extravaganza. The Baroque style sought to make those who viewed it to feel very emotional and involved in the artistic creation.

And indeed, the baroque style distinguishes Prague in terms of architecture. It can be found anywhere – from residences to castles and churches.


If you wish to enjoy the pinnacle of Baroque architecture in Prague, we recommend you take a long walk from the old city quarter Mala Strana towards the Loreta Square. This walk is a magical and enriching experience. As soon as you reach Loreta, don’t miss the massive Chernin Castle, whose main façade, 150 meters long, faces the Loreto Compound, and serves as the residence for the Czech Foreign Ministry.


The neoclassical style.

Much like the renaissance, the 19th century neoclassical style was heavily influenced by ancient Greece. Nonetheless, the 19th century, unlike the renaissance, did not require quite as many sumptuous palaces. That is why the neoclassical style was usually implemented on public buildings such as schools, hospitals and administrative buildings. A splendid example of this style are the capitol hill buildings in Washington D.C. , in the United States.

In Prague, the most famous neo-classical building is the "Estates Theater" (Stavovske Divadlo) built in the Old City of Prague in 1783. This theater was considered one of the most beautiful historical theater structures in Europe and was a centerpiece of the national Czech theater. The history of this theater is also closely associated with that of the genius musician Wolfgang Amadeus Mozart – the world premiere of his opera Don Giovani was performed here and is still included in the repertoire.


The art nouveau of Prague and Hollywood films.

The motifs of the art nouveau architecture are flower and leaf patterns, combined with descriptions of beautiful women. The art nouveau architects also sought to eliminate the differences between visual to practical (everyday) arts, or classical art and modern art.

The most distinctive symbol of the Prague art nouveau architecture is the Prague Town Hall (Obenci dum) whose construction was completed in 1911 in what is now the Republic Square. Even in this case, this is precisely a case of a "must see" structure, which you can't miss when you are in Prague. Every visitor to Prague passes at least once in the Republic Square, so simply notice what is around you when you are there.


Another great building is the Grand Hotel Eyropa, located in the Vaclav Square. This hotel was renovated into an art nouveau style back in 1905. Its extraordinarily decorated façade also appeared in Hollywood films. For example, it served as a template for the décor of the restaurants in the "Titanic" movie, and also served for real filming of scenes from the movie "Mission Impossible" (1996).


Pseudo – Moorish style – a little oriental exoticism in Prague.

This is a fascinating and truly exotic style which was influenced by Europe's min 19th century artistic romanticism. The romanticists were fascinated by anything which seemed oriental to them. In Prague, the Moorish revival style was mostly adopted by the Jewish Community, which made use of it in the decoration of synagogues. The most famous examples are the Sephardic Synagogue in the Josefov Quarter and the Jerusalem Synagogue (Hayovel) near the Vaclav Square.


Cubism in architecture – a Czech phenomenon

You've surely heard of Pablo Picasso, right? And you must have seen some of the creations of the more familiar cubist artist. In principle he performed a geometric processing on everything, creating completely unique paintings. But how can cubism be transferred from canvas paintings to building facades? Well, very few architectures around the world made the attempt. It was in the Czech Republic, in the early 20th century, that the cubist principles began to be uniquely implemented on building design.


A Czech school of cubist thinkers, architects and designers became so unique and renowned, that the Czech branch of cubism was granted its own name: rondo cubism architecture. This style is characterized by greater decorativeness than ordinary cubism in architecture.

A surprising connection between Czech cubism and real estate investments can be found in the iconic cubist building of the Adria Palace, in the street corner of Narodni and Jungmannova. One of the centrals lease holders of the Adria Palace is the leading energy distribution company in Prague - Prague Energetics, who have an energy supply contract with most apartment owners in Prague. That is why every time an apartment owner sells, purchases or leases out his apartment, he needs to go through the PRE employees in the building. No real estate agent in Prague is unfamiliar with this building.


Another prominent cubist architecture building that is very popular with tourists is the Grand Orient Café in the Old City of Prague – it is considered to be the only cubist café in the world.

Socialist architecture – an unloved legacy of totalitarianism

Honestly, this is not something the residents of Prague are particularly proud of. But for good or ill, socialist architecture is part of the scenery, and can be perceived as part of the legacy of the ling period of communism, imbuing it with real testimony in the field. 

Socialist articles usually could not be creative or bring in their own design ideas. They were usually constrained to work according to standard concept approved as "politically correct". An example of this attitude is socialist realism. This style has usually been used to design representative structures of the state and led to the design of identical buildings throughout the Soviet Union.

The International Hotel in the Dejvice Neighborhood in Prague is an early example of this. It was constructed in the early 1950s under the supervision of the Ministry of Defense of the dictator Stalin in Prague. The hotel was strongly inspired (or simply plagiarized) by the Stalin Towers – a group of seven multistory buildings in Moscow, built as a symbol of pride in the Soviet Empire.


Prague's prefab buildings

We will now review a more common communist architectural "style", one that can be found everywhere in Prague – the panelak neighborhoods. Prague is considered by the world (and aspires to be) a beautiful city packed with magnificently designed neighborhoods and quarters. In reality, however, tens of thousands of Prague residents live in "panels" – blocks of prefabricated buildings who were so typical of countries under Soviet rule or influence.

During communist times the goal was to build as many apartments, as quickly as possible. As a result, the panelank buildings show zero creativity and aestheticism. This type of residential building dominates the neighborhoods of Prague that are farther from the center of the city.


A fascinating glimpse of Prague's contemporary architecture

One can proudly state that there are so many buildings with extraordinary décor from the past two decades that it is very difficult to select only a few examples. But we still tried. 

A great example of innovative, daring and progressive design which has recently made incursions into the residential structures of the Old City is the "Dancing House" in the Jirásek Square, only a few meters from the Vltava River. The shape of the two towers of the building was inspired by the famous dancing couple Fred Astaire and Ginger Rogers. Currently, the structure serves as a hotel, a gallery, and prestigious office space.


Another daring example is the DRN building, which brought a little piece of nature into downtown Prague. When you look at aerial photographs of it, one can easily imagine it to be a verdant hill, because vegetation and greenery cover the entire façade of the building.


Innovative and important architecture for the development of new residential real estate

"Marina Island" on the Vltava River

A project of the Israeli entrepreneur DARAMIS, on a spectacular location on a peninsula jutting into the Vltava River. Buildings harmonically designed by the prize decorated architecture firm of Moshe Tzur and the AED project offer serenity, comfort and bountiful nature to all visitors. In contrast, the bustle of the city, employment opportunities, shops, cafes, culture and sport and everything else one might desire are only a short walk away, and the project is no more than eight minutes away from the center of Prague.

The V Towers – the first luxury residential skyscraper in Prague.

This V shaped building has a unique appearance. The apartments in the top floors offer a spectacular view of all of Prague – for the right price. The rate of the penthouses in the top floor reaches 200 million Czech Korunas (almost 8 million Euro!).


This is the first European residential project with the Leed Platinum certificate, the certificate requiring the most stringent environmental, operational efficiency, a residential comfort condition. The project has won two prestigious international assets awards. In the "multistory development" categories the project was awarded with all five possible stars, whereas in the "high rise residential architecture" the project reached the world finals and was designated one of the eight best buildings in the world.

The Dock Residence Project


The motto of the real estate developer Crestyl is "always look for the wow effect". This certainly applies to this magical project on both banks of the Vltava river. Part of the residence is a small pier where boats up to one meter long can dock. The project incorporates residential buildings and green commercial buildings. As a result, a new 'quarter', packed and bustling, is created – during the day it is filled by employees, and at night by residents. The project has won many architectural awards, and its new stages are still under construction, in order to create a sort of a magical "city within a city".

Green, innovative, office buildings in Prague


Primary trends in commercial real estate are the sustainability trend and the trend of modern office solutions, such as flexible or shared workspaces. One of the leading examples of implementing these trends can be seen in the "Visionary Building" constructed by the real estate developer CA Immo In the bustling Holašovice quarter. The project not only ensures healthy work conditions for workers, but fun as well. This is the first building in Prague with a running track on the roof, and the building holds the LEED Platinum certificate, the highest energetic rating a building can be awarded with.

Another flagship project of this contractor is the Amazon Court office building. "Who said Prague cannot have a jungle within the city?" was the question presented by the developer CA Imno during the construction of the Amazon Court in the Karlin District. The building won several international awards, particularly for its ecological solutions. Its seven stories are dominated by a beautiful interior atrium which is filled with daylight, greenery and pools of water. It is a place where you can breathe refreshing air and chill out, even in the middle of a workday.


In Karlin you can also find the building with the largest vertical garden in Central Europe – AFI Karlin, built by Africa Israel. Beyond being simply beautiful, the vegetation reduces the dust and regulates the air moisture and the temperature of the façade. Around 60,000 plants grow over a total area of 1,400 square meters. Every office in the building is capable of regulating its temperature, ensuring maximum comfort for workers at the site.


Mosaic house in the center of the city of Prague is the first hotel in the Czech Republic to earn a BREEAM excellence certificate. The building uses 100% renewable energy, a gray water system. The building includes additional environmentally friendly means such as solar panels on the roof, rooms with automatic air conditioning responding to the occupancy of the room, electric shading, RainDance technology showers, low flow restrooms and energy parsimonious lighting.


Summary

In this article we have tried to give you a hint of the conflicts and surprises you might find when you discover Prague's architecture. If you are real estate investors considering the purchase of a property (an apartment or a building) in the Czech Republic, we are sure you will find this article extremely useful. If, as your interest develops, you will find yourself in need of assistance in moving forward, we will be happy to help you, both in the purchase and in the management of the property thereafter.


7 reasons to invest in our new residential real estate projects in Prague

posted 7 May 2020, 13:36 by Conbiz Info Center   [ updated 16 May 2020, 00:50 by Conbiz Information Center ]

7 reasons to invest in our new residential real estate projects in Prague


Buying apartments in new residential projects in Prague is an interesting investment opportunity for many reasons. Newly constructed apartments close to downtown Prague (Prague 3 to 9) are in high demand given their slow supply on the market. Czech construction regulations really drag our the construction permit process, making it impossible for Prague developers to satisfy increasing demand and pushing new apartment prices constantly up. In addition, new apartments are a desirable housing option for reliable tenants. Accordingly an investor will have a relatively easy time renting out his property to good tenant and can usually price rent higher than a common secondhand apartment.

We have met many of Prague's leading residential real estate development companies face-to-face and have established special cooperation terms with them. This direct connection helps us to secure more attractive conditions for our clients. This often include a discount in purchasing new apartments for the buyers we represent. Other benefits can include favorable financing (see further), longer payment periods and generally better contractual conditions. Here we list several benefits we can provide to clients when representing them in deals with developers. Those benefits obviously provide an added value to their investment.

1. Be among fist who to receive an offer! 

As business partners to of many pf Prague's developers we receive many presentations of new residential real estate projects in Prague before they reach the general public. That is how we are able to select the apartments that are most suitable for an investment before they are booked by someone else. 

2. Take advantage of favorable financing: 15% down payment now, the rest after the apartment is completed. 

Projects that we offer to our clients benefit from the following financing structure:

  • Reservation fee payable after the conclusion of the Reservation Agreement. It usually makes up 2% of the total purchase price, generally around 95 000,- CZK, incl. VAT tax
  • 15 % of the real estate price, incl. VAT is payable after conclusion of the Future Purchase Agreement (further as FPA). FPA needs to be signed usually within 1 month of signing the Reservation Agreement. Once the FPA is signed there is usually a 1-month period to pay the second payment. That means the buyer has around 2 months altogether to collect his 15% down payment after signing the Reservation Agreement.
  • The final payment, to the sum of 85 % incl. VAT following project completion. This is usually achieved within 2 years of signing the Reservation Agreement. That means there is a plenty of time for our clients to collect their 85% either from their own funds or by taking out a mortgage in the Czech Republic. 

3. Benefit from more attractive conditions negotiated for our clients

When negotiating apartment purchase conditions our goal is to make ensure that clients’ interests are well represented, and that the contract is as favorable as possible. We usually manage to negotiate longer payment periods for our clients. We seek out developers who understand that the buyers we represent often need to perform international transfers to pay the purchase price, which requires more bureaucracy and time. We also undertake efforts on behalf of our clients to mitigate their contractual penalties, set up protected escrow accounts for their deposit payments, and ensure they are properly notified in a timely manner by the seller regarding any issue which might arise during the project etc. We also make sure that our clients fully understand their rights and duties; that is why we prepare for them a well-structured summary of all contracts including payment instructions and project timeline.

4. Maximize your profit by using mortgage leverage provided by Czech banks 

Those investors who like using bank leverage to maximize their return on investment can apply for personal mortgage in Czech Republic. Currently we are able to help clients finance new projects purchases up to 60% LTV (last updated March 2020).

5. We make sure you will have an exit strategy 

If your plan "A" (=purchase an apartment) doesn't pan out the way you expected, the majority of contracts with developers also provide for a plan "B" – transferring Future Purchase Agreement to another buyer. We always attempt, and are usually successful, in negotiating this transfer clause into our client's contracts. This transfer clause is useful for you in case you have serious reason not to sign the Purchase Agreement and pay the last payment. For example, if you fail to secure mortgage financing in Czech Republic or your personal situation changes significantly (for example, you lose employment income, get long-term illness, etc.). 

6. We help you reach growth of property´s value right after project is finished 

That the premise is that within 2 years of signing a reservation contract and completing the apartment´s construction, the market price of your apartment will grow.

One of major reasons which let us assume that growth will continue for next years is the insufficient supply of new apartments for Prague residents wand the constantly increasing migration to the Czech Capital. You can observe this stable trend of growth of new residential real estate prices in the Czech Deloitte real estate index which maps evolution of those prices.

Of course, we cannot influence how real estate market turns out in years following your signature on a Future Purchase Agreement. However, we can help you increase probability that value of your new apartment will grow. Here is how:

  • We always help our clients select an apartment which our experience leads us to believe is particularly suitable for investment and renting. We consider price, layout, location in building, future rent, etc. and recommend apartment with best cost-benefit ratio
  • We can economically manage kitchen design and installment after taking apartment from developer (in Czech Republic the kitchen is not included in the construction of new apartment),
  • We often get discounts for our clients (especially if client purchases more than 1 apartment). 

7. Benefit from our post-purchase service, including renting and property management

We do not consider our job to be done once we hand over the keys we received from the developer of your new flat. We can continue helping you to make your investment successful. Our post purchase options include:

  • Designing and implementing kitchens at favorable costs 
  • Filling purchase tax reports 
  • Securing reliable tenant 
  • Long term property management including rent collection, dealing with the tenant, solving problems, flat insurance management etc., mortgage management.
  • Filling annual tax returns including payment instructions,
  • Selling your flat. 

Finally, we would like to point out other important benefits of purchasing a newly built apartment.

Standard purchases of apartments are subject to 4% real estate acquisition tax paid by buyer. However, apartments sold directly from the developer immediately after they are constructed and permitted to be used for living (first sale of apartment) are exempt from this real estate transfer tax. Buyer only must submit tax report to authorities with 0, -CZK reported tax.

According to Czech construction laws, real estate builders must provide the buyer with at least 2-year quality warranty. This guarantees the removal of defects found by buyer after moving to his new apartment in the shortest possible time after developer was notified. Some developers even provide the extended three-year warranty period. 

Want to know more about our experience with investments in newly built apartments? Contact us, we will be happy to answer your inquiries.


Discover top 7 strategies we use daily to find and win best real estate deals in Prague

posted 30 Mar 2020, 14:09 by Conbiz Info Center   [ updated 30 Mar 2020, 14:11 ]

Discover top 7 strategies we use daily to find and win best real estate deals in Prague

Over our decade on the Czech Republic real estate market, we’ve employed a variety of investing strategies. Here, we list those we consider to be essential to our success on the extremely competitive Prague real estate market. Further we describe practices and software tools we use on daily basis to improve our sourcing and analysis of investment deals. We also systemized a process of deal presenting to our clients so that we can act faster than our competitors. More than this, our overall strategy is to gain as complex experience in the field as possible to dramatically increase our worth for clients.

1. We aim to be the first to know about the best deals.

How? By constantly developing a lead funnel of "off market" offers. We see real estate as a relationships based business. Accordingly we have invested, and continue to invest, a lot of time and energy in creating and developing valuable connections across the market. After many years of active business development efforts, we become an integral part of the unofficial realtors’ network in Prague. Barely a day goes by in which we do not receive some offer from one of our colleagues, which include real estate agents, investors and other realtors. Many of the offers which come our way are "off market" - unlisted on any Czech public real estate platform.

There are various reasons why sellers might wish to offer their properties "off market". For instance, when the property on sale is an apartment building, the seller often wishes to keep the information about the sale from spreading among his tenants. Another common reason is that the seller simply wants to save himself the marketing costs and therefore seeks to the word about the sale via his network of his real estate investors contacts before he lists the deal publicly. This is often the case in smaller developers’ projects.

We are subscribed to the mailing lists of all Prague major developers. We have met many of them face to face and have negotiated special cooperation terms in personal meetings. As a result we receive many presentations of new residential real estate projects in Prague before they reach the general public.

Such off market real estate offers in Czech Republic are often very interesting for investors, since their conditions can be quite attractive. And we don’t just mean good pricing. But often there can be other benefits – interesting deal financing options, property location growing potential, discount possibilities etc. 

2. We also purchase directly from properties owners.

Our daily routine includes screening real estate listings from private individuals. It is very common practice in Czech Republic to sell, purchase or rent a property without any help from real estate professionals. is the primary reason for this is the
widely spread distrust of real estate agents due to the absence of proper regulation of their professional entry requirements, due to poor legislation. Such real estate agent absent transactions represent a very significant portion of Czech real estate deals. Therefore, there are quite a few websites which specialize on this type of listings.

What makes those deals potentially interesting for investors? If the owner sells without an agent, the price is often lower because the owner does not know the market well as a professional agent and may price the property much cheaper than the market would allow (of course, they quite frequently overprice very their property and cannot secure a purchaser)

To make searching for these deals more effective, we use specialized search engine software for investors with paid subscription. These engines monitor private listings market on an hourly basis and we are rapidly notified if a good offer surfaces.

Deals with owners are often more challenging in terms of negotiation, since the seller is not a real estate professional and that communication with him may be more emotional and volatile. It is therefore very important for buyer to be familiar not only with general real estate negotiation strategies but also with the mentality of the local real estate owners.

3. We tack developments in real estate prices based on data from the Czech Land Registry

Statistics show and average 10-15%  difference between the listed prices and the final closing prices of real estates in the Czech Republic(in Prague 1 and 2 the difference is over 30%). Therefore, it is extremely important to be aware of the final prices for which a property in a particular location has actually been sold. For this purpose we use another prepaid tool –
Pricemap – which collects big data from all real estate sales registered in the Czech Land Registry (every real estate purchase in Czech Republic must be registered in the Czech Land Registry “KatastrNemovitosti”). 

Knowing the real closing prices of real estate deals gives us the confidence we need not only to optimize the outcome of negotiations but also in our business planning. Especially when working on sales projections for bigger real estate projects, we want our business plans to be as accurate as possible. Therefore, we always analyze real prices from Pricemap.

Overvaluation of listed prices of real estate in Prague neighborhoods. Y axis: overvaluation in %. X axis: timeline

From Czech Real Estate Conference 2019.

4. We systemize the process of deal presentation to our clients and closing.

The hard truth about investing in real estate (not only) in Prague is that attractively priced deals disappear in days, even hours in some cases.
Every fifth apartment in Prague is bought by investor. So there is really big competition between investors in Prague market.

Our position as deal broker is even harder because we need to wait for client´s approval about closing the deal. We try to mitigate this time disadvantage by using a systematic approach:

  • We share a virtual viewing with our client immediately after visiting real estate, using WhatsApp or similar cloud tool
  • We have executive viewing summaries templates which are very structured and provide investors with clear and detailed information about investment opportunities.
  • We don´t wait for the client to come from abroad to sign reservation contract. We could easily lose sellers by such a rigid approach. We ask clients to sign power of attorney over to us and send us their scanned signatures immediately. As such, we can sign reservation contracts on their behalf immediately after they provide us with consent to do so.

5. We are not afraid of difficult transactions, if the price and potential benefits justify them. 

We have gained  broad experience and knowledge in hundreds of real estate transactions done in the Czech Republic. We work with lawyers, accountants, bankers and other professionals specialized in real estate transactions. We know how to purchase a problematic property for a low amount of money. However, in such cases we always ask ourselves the question – is this property really worth our time and money? If the answer is positive and we can eliminate the potential risks of deal by thanks to our experience and knowledge, we provide the seller with our offer.

What kind of challenges are we talking about? It can be the purchase of property with the pledge of private creditor. Or a scenario in which the owner wants to sell his apartment now but for various reasons wishes to continue living in it for a few more months. Or a case when the subject of purchase is not a property itself but an SPV company which owns the property. Most of the time such deal require us to invest some extra time and resources into due diligence process, contracts negotiation etc. But it pays off once the deal is finalized and the problems are solved, because the value of the property increases dramatically. Also, if the deal looks more complicated at first glance, there are fewer potential purchasers. This represents a good opportunity for professional investors to negotiate good price.

6. We can help our clients to invest in “fixer-upper” properties 

Properties which require redesign and reconstruction are typically offered at a low purchase price. Every year we carry out many reconstructions of apartments. We have experience with the whole process of reconstructions – interior designing, budgeting, allocating resources (people and materials) and project management. Therefore, we can do the math for our clients. We calculate the finances and time scale of such a project as well as the expected profit after increasing the value of the property. And after purchase we can do the reconstruction project management.

7. We try to learn the real estate business from all sides

Our general approach to real estate which we try to apply daily is to gain as complex an experience in the field as possible. As real estate experts we know that there is more than one way of making significant profits in real estate investment deals. In one deal profit can be achieved almost immediately by sourcing a good deal and negotiating the price. In other deals profits can be delayed until the property´s value is increased by reconstruction – but they can be much higher! And all rental property owners benefit from good tenants.

We are used to act daily in various roles: as an investor, real estate agent, property manager, construction manager or business consultant. 

For example, in addition to mediating deals for our clients we too make our own investments in real estate. That gives us important firsthand experience of having our own capital at a stake. We also manage a large portfolio of apartments in Prague, Pilsen and other Czech towns. We therefore understand the Czech rental market, tenants’ behavior and property management issues very well, from personal experience.

We believe that being able to think and act in all of the aforementioned roles gives us strong advantage when creating strategies for our clients - investors.

Want to join in the success? Contact us


In a new development, international investors can now receive up to 60% financing for the purchase of Czech real estate!

posted 1 May 2019, 22:56 by Conbiz Info Center   [ updated 2 May 2019, 10:38 ]

In a new development, international investors can now receive up to 60% financing for the purchase of Czech real estate!

As is well known external financing is often an attractive way of leveraging your capital and transforming a good investment into an excellent investment.

Until a year ago international investors, including Israelis, enjoyed the possibility of securing extremely generous morgatges from Czech Republic banks. However, about a year ago the Czech banks completely cut off credit to foreign investors. This was a purely business decision which sought to reduce risks deriving from overexposure to foreign investors.

However, following a long negotiation with one of the largest banks in the Czech Republic, we are pleased to announce that we have finally established an extremely comfortable loan avenue for Israelis to purchase real estate assets for investment in Prague (the capital of the Czech Republic) and Pilzen (the fourth largest city in the Czech Republic).

From this day (1 May 2019) forth, investors seeking to secure financing for their acquisitions need not be citizens or residents of the Czech Repulic. Yes, Israeli investors can also secure financing of up to 60% (!) to purchase revenue producing real estate in the Czech Republic.

By the way, for projects such as purchasing buildings, renovating or upgrading them, and selling thereafter ("flipping") it is possible to secure, following the submission of a business plan, funding of up to 70% and sometimesthe same percentage of the renovation.

For additional information



The impact of rising tourism on apartment prices in Prague

posted 1 Mar 2019, 05:22 by Conbiz Info Center   [ updated 1 Mar 2019, 05:22 ]

The impact of rising tourism on apartment prices in Prague


The Czech Republic is considered to be a genuine tourism powerhouse. Breathtaking scenes and nature, historical cities and comfortable transportation are only some of the factors behind the country's great attraction to tourists. Being located smack in the center of Europe has also helped it become a first class tourist site. Only a few hours by train sperate the capital of the Czech Republic, Prague, from Vienna and Berlin. Thanks to the Schengen Agreement, travel between these states is comfortable, affordable and does not involve any passport control checkpoints.

Tourism in Prague

Most tourists who arrive in the Czech Republic spend several nights in Prague and continue onwards to the rest of the state. However, a significant portion of them come specifically for Prague and to no other site in the country. What this means is that from year to year the number of tourists visiting Prague is constantly rising. For example, in 2018 Prague registered a rise of 3.2 percent in the number of tourists in the city compared to 2017 – roughly 8 million visitors to a city with a population of only 2.5 million people. This is after 2017, which is considered a peak tourist year – with over 20 million tourists in all of the Czech Republic (a rise of over 9% in comparison to 2016).

The impact of tourism in Prague on the residential real estate prices in the city

One of the influences of tourism is on the cost of apartments, particularly for the purpose of short term tourist rentals. The data of the central office for statistics in the Czech Republic indicates that in all of the Czech Republic, the number of visitors to the various hosting sites such as Airbnb (and other such platforms) has reached 21.3 million in 2018 – 1.3 million more than in 2017, which constitutes a rise of 6.4%. the great demand for short term living accommodations leads to an often double digit return on investment for residential apartments purchased in Prague.

Another effect of tourism is on the prices of second hand apartments. A survey performed in the field by the Bezrealitky Portal has found that Prague is the most expensive city in the Czech Republic in terms of real estate. In Prague, prices have reached 80,361 Czech Korunas per square meter (According to other surveys, these prices have reached 101,091 Czech Korunas per square meter). The prices of private homes have also risen over the past year and Prague has registered a rise of 36% in their prices (Up to a level of 68,647 Czech Korunas per square meter).

What does the future hold?

The expectation is that the real estate prices in Prague will continue to rise and in some areas even more than in the previous year. For example, in the center of Prague and in sites that are a short distance away from the capital. The reasons for this, other than the rising tourism, are many, such as non availability of rental apartments in the areas of greatest demand, construction laws which place encumbrances on the beginning of construction, long processes to receive construction permits and the absence of infrastructure to expand real estate supply.

Are you interested in investing in Prague? Join us


Real estate values in the Czech Republic continue to rise

posted 25 Feb 2019, 06:41 by Conbiz Info Center   [ updated 9 Mar 2019, 10:47 ]

Real estate values in the Czech Republic continue to rise

Data from various sources indicates that, much as expected, the real estate prices in Prague are only rising and that this trend is not expected to change. The projections were that a rise of 10% in 2017 and a rise of 7.5% in 2018 would take place but of course reality exceeded all expectations : in 2017 the price rises were 13.3% , the highest rise in the European Union countries.

The Graph below (Source) illustrates the changes in prices for new apartments between 2013 – 2017 after the removal of outliers amounting to 5% of the most expensive and least expensive apartments.


An additional study indicates that over the years 24014 – 2018 the real estate prices in Prague have risen by 59.3%, so this represents a stable trend of increasing real estate assets value (source).


What is the significance of this in terms of price per square meter?

In 2016 the price of new apartments in Prague reached an all times record high – 60,000 Czech korunas per square meter. This record however was broken in 2017 – on that year the average price per square meter in Prague for all types of apartments (new and second hand apartments) was 65,000 korunas. In this year the most popular districts for investment in the city were Prague 1, Prague 2 and Prague 6. The significance of this is that the price of, for example, a 60 square meter apartment (the average apartment size in Prague) has risen by over ten percent in 2017 alone. The graph below proves this (Source).


In 2018, the average price of a new apartment in Prague rose by 18.6% to over 101,061 Czech Korunas per square meter. In addition, the restrictions placed since June 2018 in the field of mortgages makes the dream of purchasing an apartment almost impossible for many Czechs.

The significance of all this is that as the quality of life in Prague continues to rise, purchasers of apartments are forced to settle, both in terms of location and in terms of the size of the apartments, in order to enjoy affordable housing. Inexpensive housing at a level of beneath 60,000 Czech Korunas is almost unobtainable.

The price rise per square meter in the Prague 1 District 

The significance is that a 50 square meter apartment which cost 6,750,000 Czech Korunas in January 2017 today costs 7,650,000 Czech Korunas

The price rise per square meter in the Prague 2 District 

The significance is that a 50 square meter apartment which cost 4,820,500 Czech Korunas in January 2017 today costs 6,075,000 Czech Korunas

The price rise per square meter in the Prague 3 District

Here, a 50 square meter apartment which cost 4,125,500 Czech Korunas in January 2017 today costs 4,825,000 Czech Korunas

The price rise per square meter in the Prague 9 District

The significance is that a 50 square meter apartment which was sold for 2,950,000 Czech Korunas in January 2017 today costs 3,910,000 Czech Korunas

The housing shortage in Prague is only growing more acute 

Over 2018 only 5000 new apartments were apartments - a decrease of 9% in comparison to 2017. That was the lowest level since 2012 and a decrease of 30% in comparison to the peak year of 2015. Most of the apartments that were handed over were in Prague 5 (23%), Prague 9 (20%) and Prague 10 (17%). The lowest level of new apartment handover was registered in Prague 6 – only 2%. This level is projected to decrease further in 2019 to 4600 new apartments.

The contractors claim that as usual part of the problem derives from the fact that few new construction apartments are being provided – what prevents them from meeting the rising demand for new apartments in Prague. Additional reasons are the new guidelines in the field of mortgages and rising interest rates.

What this means is that smaller apartments may be more expensive per square meter, but they are less expensive than large apartments. The most expensive apartments are 1 + KK deployment apartments at an average cost of 120,000 Korunas per square meter. After them in the price range are apartments in the KK +3 deployment sold for, on the average, 92,000 Czech Korunas per square meter. About 70% of the apartments in Prague were sold for a price higher than 90,000 Czech Korunas per square meter.

It is therefore no wonder that the scope of real estate transactions in Prague has declined by a third in 2018 – to only 60 billion dollars. Some 60% of the investors are locals and some 20% are Germans who identified the potential for investment over the border. In other words, purchasing an apartment in Prague offers them a very fine return on investment from rental fees alone.

The rental prices in Prague continue to rise

In Prague, an average rise of 2.5% a year in lease. Nonetheless, in comparison to other European cities, the rent rates in Prague were the lowest this year. Only in Warsaw was a higher rate registered – 4.3%.

Prague was fifth in the survey of the KPMG company which examined the rent rates in Europe : first ranked were the German cities Munich and Berlin (at 11,345 and 10,142 Czech Korunas per square meter respectively), Vienna (7913 Korunas per square meter), Warsaw (7376 Czech Korunas per square meter).

Are you interested in purchasing real estate in Prague? Please contact us and we will be delighted to help you locate a great investment in this beautiful city.


Minimum wage in the Czech Republic rises again

posted 22 Jan 2019, 01:49 by Conbiz Info Center   [ updated 22 Jan 2019, 01:50 ]

Minimum wage in the Czech Republic rises again


On January 2019 the minimum wage in the Czech Republic will rise by 1150 Korunas to 13,350 Korunas. This rise is projected to influence many financial obligations such as income tax deductions, the income tax rate and tax benefits for working parents.

The rise in the minimum wage is expected to jeopardize the statues of the Czech Republic as an inexpensive country, that is as one of the countries in the European Union where salaries and labor costs are particularly low. However, since the raise is not limited to those who receive minimum wage (some 150,000 people) it is expected to impact the entirety of the market.

As a rule, a higher wage results in higher tax and health insurance payments, both on part of the employers and on the part of the employees. The health insurance in the Czech Republic today constitutes 13.5% of the wages and the minimum payment is 1803 Czech Korunas a month. The minimum wage constitutes the basis for calculating the health insurance of tax exempt individuals such as part time employees, students and the unemployed.

In addition, the minimum wage constitutes the basis for calculating the maximum possible subsidy for unemployment subsidies – the ceiling is equal to half the minimum wage. In addition, the minimum wage affects the pension which is considered to be tax exempt up to a certain ceiling – up to 36 times the minimum wage. The minimum wage also serves to calculate some of the tax exemptions for working parents and hence is also expected to influence this field.

The significance is that the rise in the minimum wage contributes, among other influences, to the national budget. The revenues of the Government of the Czech Republic is projected to be 1.26 Czech trillion Czech Korunas more than in 2018, primarily thanks to various taxes and fees. That is why there is no wonder that there are already those in the Czech Republic calling for an even greater increase in the minimum wage.

More on wages and salaries in the Czech Republic.


Relocating to Prague? This article is for you

posted 14 Jan 2019, 00:08 by Conbiz Info Center   [ updated 14 Jan 2019, 00:12 ]

Relocating to Prague? There are a few things you should know about seeking and finding an apartment in the Capital of the Czech Republic 


Question – how long does it take to lease an apartment in Prague?

Answer – it all depends on what you are seeking and what your requirements are. If you are looking for a reasonably priced apartments in the center of the city then you need to hurry up – the demand for apartments in this location is high and they are often leased within 48 hours of being advertised. Small apartments for short term lease are also difficult to obtain

Question – what do you need to know before you start seeking an apartment in Prague?

Answer – first of all, do not permit yourself to be enticed by real estate offers on Facebook (unless they are direct publications by a recognized and established real estate agencies). We have heard of many scams, including scams leading people that are not careful into being tempted to pay a down payment prior to signing a contract.

It is recommended that you set down your parameters and seek an apartment that meets various parameters that are important to you, such as travel time to work, distance from educational institutions and so forth.

Question – what are the lease rates of apartments in Prague like?

Answer - the prices in Prague as of now are at their peak and range between 13,000 - 35,000 Czech Korunas a month for a fifty meter apartment and there are, of course, also higher price range apartments on the market. It all depends on the location of the property, its size, its furnishings and more…

Question – where is it recommended to lease an apartment in Prague?

Answer – in zones 4, 6 and 7. All of them have excellent public transportation access, an abundance of parks and many municipal services and yet their lease rates remain quite reasonable. However, there are quite a few other recommended neighborhoods. Each has its own advantages and disadvantages.

Question – what does one need to take into account insofar as additional cost such as heating are concerned?

Answer – it is worthwhile to diligently read the lease agreement and examine what exactly it includes. Sometimes the lessor is responsible for the fees of various services – and that means that various other costs are to be expected. In addition it is worthwhile to examine the quality of these services (heating, elevator, electrical systems, water and so forth) so as to avoid unpleasant surprises in the event that it is the lessor who is responsible for bearing unexpected expenses (malfunctions, repairs and so forth).

Question – are there any additional payments such as a deposit? How does it work?

Answer – in the Czech Republic it is customary to pay a deposit to the landlord. This deposit is generally equal to the sum of a month – two months of rent, but if the leased apartment is fully furnished in can be higher.

Question – what is the significance of kk?

Answer – the significance of kk is "kitchen corner". This concept is common in new buildings because in them the kitchen is part of the residential area and not a room in its own right. In other words, if an apartment the size of kk + 2 is described, what this means is that the apartment contains two rooms and a kitchen corner. The same is true for kk + 3, kk + 4 and so forth. On the other hand, if the apartment is described as 2+1, this means that it contains two rooms and another room which is the kitchen. Read more about this here.

Question- are pets allowed in a leased apartment?

Answer – the law of the Czech Republic prevents a landlord from prohibiting the entry of pets into an apartment. On the other hand – pet friendly apartments are considered rare and so usually require negotiations with the landowner and a larger deposit.

Question – what about the Czech neighbors? Are they friendly? Is it considered acceptable or customary to knock on their doors and introduce myself to them?

Answer – generally speaking, the Czech neighbors tend to be a little shy. English is not a common language amongst the older generation and it is customary for the new residents to be held responsible for establishing neighborly relations – it can only be beneficial to do so.

Question – can I invite friends or family members as guests in my apartment?

Answer – of course. Visits by friends and family are not contrary to any Czech Republic law. If they are Israeli, their tourist visa is valid for 90 consecutive days. Insofar as guests from other (non-EU) countries - it is always worthwhile to check in advance.

Question – what is the customary early notice period for leaving the apartment?

Answer – the lease end period must be regulated in the contract. For the most part it is 3 months long and a 1 month notice is considered to be quite rare. Usually if the residents seek to leave the apartment earlier than usual – they will lose their deposit money unless an early understanding on the matter is reached with the property owners.

Additional information can be found here regarding work in the Czech Republic


The Na příkopě Street in Prague 1 is now one of the most expensive streets in the world

posted 30 Nov 2018, 05:17 by Conbiz Info Center   [ updated 30 Nov 2018, 05:17 ]

The Na příkopě Street in Prague 1 is now one of the most expensive streets in the world 

The Na příkopě street in the Old City of Prague is now the 19th ranked street in the world in terms of rent rates, according to a study performed by the Cushman and Wakefield Company which reviewed the rent derived from apartments in 446 streets in 65 countries.

The most expensive street for rent in the world is the Causeway Bay Street in Hong Kong. The second is fifth avenue in New York. In Europe the most expensive street for rent was the New Bond street in London – a ranking which made it the third highest street in the global ranking.

However, thanks to the rise of 5% in the rates of rent over the past year, the Na příkopě Street in Prague 1 has reached the 19th rank this year (2018). The average rent per square meter in this street is 6000 Czech Korunas. (!)

One of the factors impacting the height of rent is the location of the apartment on the street and its size. The most attractive apartments are corner apartments or studio apartments. The latter usually charge higher rent.

Another apartment in Prague considered expensive in terms of rent is the Pařížská street. However, the Pařížská street is not a residential street for the most part but a commercial and trade boulevard. Another difference is that the Na Příkopě street is more touristic so that the potential market of tenants is more wide range than the Pařížská street.

Nonetheless, this street also has international brands such as Tous, Vapiano and Swarovski and includes the flagship store of the international brand H&M. The street is already considered the most important shopping street in the Czech Republic given its location.

It is however important to note that this street has yet to reach its full potential and in the near future its attractiveness is still projected to rise. Among other things, the renovation of the Savarin palace that will be connected to other buildings in the street and the renovated Václav Square is planned. In addition, the street is projected to be the site of additional business compounds, such as in Václav Square and the National Museum.

Are you considering the purchase of real estate in Prague? Talk to us.


Comprehensive review of heating systems for residential homes in the Czech Republic

posted 30 Nov 2018, 04:24 by Conbiz Info Center   [ updated 30 Nov 2018, 04:25 ]

Comprehensive review of heating systems for residential homes in the Czech Republic 

מבנה הסקה מרכזית אופייני לעידן הקומוניזם - חברת MVP הצ'כית

Summer in the Czech Republic does not last long and heating systems in private and apartment buildings are a critically important element. The homes are heated from as early as September to May and even June. The heating systems in the Czech Republic are diverse and change in accordance to the history of the structure, in depending on the type of the house and just how cold the environs of the building get.

The Primary heating systems are:

Central heating

The central heating systems in the Czech Republic were built primarily in the communist period, as the communist government favored centralized services. However in spite of the time that passed since the fall of communist rule in 1989, some of them are still in use to the present day. These systems generally include the following features: a single large heat source, a number of transmission stations and end stations that connect between different consumers. These heating systems mostly utilize fuel, oil, gas or coal.

The primary advantage of these systems is their ease of use. The home consumer simply opens the valve (which is also used for heating and supplying warm water) or call the supplier in case of an accident. If such a system is installed in an apartment building, the residents are not required to sign a contract versus the supplier because the heating is included in a package which includes additional payments (maintenance, cleaning common areas, a maintenance fund and so forth') which are paid by building committee.

The downside of this heating solution is its inefficiency, in other words, massive losses of energy between the energy source and the final consumer. Sometimes as much as 40% of the energy can be lost along the way – which of course comes out of the pocket of the apartment owners. In addition, the maintenance costs of the heating infrastructure and the large scale transference are considered to be expensive, so that the home owners must absorb these costs as well. You will likely find the central heating system in old Soviet era buildings (Sídliště) if no central heating system exists in your building you should not install it – the operation is difficult, and it is not reasonable that you should pay such high rates on your heating energy when other, more affordable types of heating systems are readily available.

דוד גז מקצועי המשמש במערכות חימום מרכזיות

For example, the Prague Heating Corporation, Pražskáteplárenská a.s, bills over 650 Czech Korunas on every kilowatt of electricity, VAT included, without taking into account energy losses deriving from the distance between the source and the recipient.

It is very easy to break away from the public network and develop a local heat source in every building – a very common practice in those areas of the Czech Republic which enjoy access to effective electricity networks.

Nonetheless, there are sites where it makes sense to maintain central heating (for example large industrial regions) for one reason – in these places the heat is a beneficial byproduct of the industrial process. An illustration of this is the area of the power station Opatovie, where the final price in 2017 for a kilowatt of electricity was around 500 Czech Korunas. However, as a general rule, the prevailing trend is to minimize central regional heating systems and to prefer more efficient local solutions.

Central building based heating

A similar solution to regional central heating is a central building based heating. For the resident, it is much the same: heating and heated water is supplied just as in regional central heating. The difference is that the energy source is located in the building itself, usually in a special boiler room in the basement of the building. The significance is that energy losses are considerably lower in comparison to the transmission of heated water/ steam from a central location many kilometers away.

The energy losses in the interior pipes of the building are barely felt by the residents since the HOA of the buildings receives fuel for a relatively low price given the massive amounts they purchase each year. In some cases the issue of the heating is handed over by the HOA to special committees in the framework of outsourcing, but the local energy source is retained.

מערכת חימום מבוססת גז במרתף של בניין דירות צ'כי

If the management of the system is done properly, the energy prices in such a setup should be lower than in regional central heating. In any event, the pricing calculations should include the initial investment in setting up the building central heating up, and the cost of maintaining the system. This type of heating is primarily used in newer buildings, but it is also sometimes used in old brick buildings or Panelák.

Individual heating

Individual heating is used both in private homes and in apartments in large buildings. In order to do so one can use two sources of energy, but for the most part only a single source (mostly in private homes) is used, due to the regulations in the field of fuel storage. We will shortly expand on this. 

Usually, personal heating results in the lowest energy losses, but home owners must pay higher retail prices for the energy source: either fuel or electricity. In any event, the primary problem is maintenance, because the cost of repairs and replacement parts is levied on the homeowner and a professional is required to make repairs. Furthermore, the chimneys and the boiler must occasionally be inspected, in order, for example, to examine the levels of carbon dioxide emitted into the atmosphere.

Solid fuel combustion systems

דוד פחם מודרני עם תא אחסון לדלק והזנה אוטומטית

These systems produce energy by burning solid fuels such as wood chips or blocks, with their combustion heating up water. The warm water is transferred to radiators, water pipes or containers. In these systems fuel expenses are relatively inexpensive but the setup costs are higher. In addition, since storage of fuel is required in this case – such systems are not suitable for apartments. Furthermore, the property owners must ensure the supply and quality of the fuel in accordance to the specifications of the boiler: it must be fed with specific types of fuel, sometimes several types or a specific mixture. It is important to note that certain modern devices can feed themselves with fuel automatically, but they still must be manually filled, and their operational mode must be defined.

Gas combustion boilers / heaters

This technology is similar to the solid fuels combustion heaters, but it is more convenient, for no storage of fuel is required (except for LPG based solutions that are primarily used in homes which are not connected to natural gas networks) or manual control and fueling. There are three primary types of devices of this sort:

  • WAW stoves – local devices lacking a water circuit that produce heat but not hot water. They are most commonly used on old properties.
תנור גז מקומי מודרני

  • Karma boilers which are used to supply warm water, but not to directly heat the property. This type of boiler is also primarily present on old properties.
  • Integrated boilers – boilers which supply both heated water and heat through water radiators. Use of these boilers is the most common on Prague properties.
דוד גז ביתי משולב בבית

Heat pumps

Heat pumps are systems that operate on the principle of using air conditioners solely for heating. These systems include three types of devices with 2 main advantages:

  • They are usable everywhere and require only one energy source (electricity).
  • They are far more efficient (up to threefold) than regular electric heaters. This derives from the fact that heat pumps may make use of electric energy, but primarily to transfer thermal energy outwards.

Group 1 – air to air solutions

מזגן

The heating devices in this group are in fact heat exchange air conditioners. In other words there is no use of internal radiators, so that the rooms are warmed solely by heated air leaving the devices. In the summer these devices can be used as air conditioners.

These systems are primarily used on properties that are not populated all year round (such as vacation homes), because they are highly efficient in freezing weather. These systems must be backed up with other heating systems, such as electric stoves. These heating systems are the only type suitable for use in apartments because they do not require extensive external infrastructure.

Group 2 – air-water solutions

משאבת חום אויר מים

In these systems the heat exchange is warmed by the air coming from without, but the heat s distributed by water to the radiators or pipes to heat the floor. The advantage is that the system can be connected to the existing piping and thereby save work hours. The costs of heating utilizing this system are low, but the purchase price of the system is rather high. In addition, the system is not particularly efficient in freezing situations.

Group 3 – water – earth solutions

איור של משאבת חום מבוססת אדמה מים

This solution is much like the water- air solutions with one key difference: the location of the heat exchange. Unlike the air-water systems, in the heat exchange here is located deep in the ground, where the temperature is stable all year around. The significance of this is that the system is far more effective in freezing weather, which is precisely the time when it is most needed. On the other hand, this solution is considered to be the most expensive of all the heat pumps.

Fireplaces

For day to day use, fireplaces are primarily an aesthetic addition or a supportive solution for another, automated, system. While certain fireplaces include a heat exchange that can be directly attached to a radiator by a water pipe, for the most part the heat is directly distributed by heated air manufactured by the fire.

קמין

Solar collectors

Unlike photo voltage panels, these systems do not create electricity, but use the rays of the suns to heat water. In fact, these systems can be used both to supply heated water, and to heat the home. There great advantage therefore is in the fact that sunlight is free and that there are no heating costs other than the costs of installation and maintenance.

פאנלים סולאריים

Nonetheless, these systems are not sufficiently powerful to provide heated water and heat apartments 24/7 (particularly in the cloudy Czech winter). A supportive solution of some type is required. In fact, solar collectors usually serve to reduce energy consumption and heating costs, rather than providing a comprehensive solution. Furthermore, since a large roof space is required to install the system – this solution is particularly suited for private home owners.

Local electric heater

This is supposedly the simplest and least expensive solution which requires the lowest costs of installation and technical requirements (other than powerful fuses). In a local electric heater use is made only of electricity, so that it is far less efficient than heat pumps. The meaning is that heating prices in this case are considered high.

Since local electric heaters are not very efficient, they do not serve as a primary source of heating but only as a supportive solution (for example of properties that are not populated year round). This category also includes heating with various types of infra-red panels.

Floor – embedded heating

חימום רצפתי

This type of heating is considered exclusive but is usually not used as the only heating solution but is combined with various other radiators. Floor embedded heating can be performed solely by electricity or be part of a more complex solution such as a generator linked to a water based heating system.

Accumulation electric boiler

This solution includes a water tank equipped with an electric spiral that warms the water within it, so that it is primarily intended to supply heated water. Since the energy costs required from using these systems are relatively low for local electric heaters - they are used primarily during the nighttime in order to utilize the low electric billing rates during those hours.

דוד מים מחומם על ידי חשמל

Since this is a simple solution, it is frequently used as a source for heated water in addition to solar systems. It is common in many apartments in Prague. Sometimes the water tank can be heated by a gas based boiler which is used as a backup when the central heating system is inactive (for example in the summer months).

Who pays for the heating?

In most cases the costs of direct heating are paid directly by the resident or the lessor to the HOA (except in short term rental properties). If use is made of personal heating units the resident is responsible for signing an agreement versus the energy/ fuel supplier and pay for whatever he consumed.

Sometimes, the contract versus the supplier does not change (when the property owner is the one who signed the contract versus the supplier), so that the lessor pays the energy fees in addition to the apartment rental fees. If the apartment is used for short term rentals, the heating costs are paid by the owner unless the rental arrangements are carried out by a management company. In these cases, the management company pays the fee to the property owners who are signed up with the energy suppliers.

It is important to note that Czech Republic law defines the maintenance costs of the heating systems (periodical checkups, repairs and so forth) as paid by the property owner, for it defines the heating system to be an inseparable part of the property.

On the other hand – it may seem preferable for property owners to equip the apartment with heating solutions with low installation and maintenance costs, so that the price of the heating price itself is insignificant. On the other hand, there may be pressure on the part of the tenant to reduce the rent for most tenants calculate the final costs. Furthermore, in recent years more and more people have begun to take the ecological impact of residence into consideration, so they will prefer properties with higher energetic efficiency.

Energy Performance Certificate (PENB)

Energetic performance of buildings related to the issue of heating systems. A new regulation requires any revenue generating real estate property to include a PENB grade certified by a qualified inspector (The grade ranges from A – maximal energy performance, to G – low energetic performance). Falling to provide such a certification, automatically renders the property a PENB G level property.

This ranking system is similar to the energetic ranking provided in the European Union to various electrical devices and its purpose is to motivate the property owners and contractors to build and repair the properties in a manner that will result in maximum energetic efficiency. Since such ranking takes into account renewable energy parameters as well, one should see it as a warning to the property owners and future residents : while it is possible to save money by renting/ purchasing a low energy performance property, this means higher bills and indirectly wastage of resources.

דוגמה לאישור יעילות אנרגטית

A table summarizing the types of energy sources for heating in the Czech Republic

 Type Price per Kilowatt inc VAT (2018)Used in buildingsUsed in apartmentsUsed in private homes
Solid fuel boilersCoal or wood – 250-350 Korunas V  X  V
Gas boilers / heatersNatural or fluid gas : 440-640 Korunas V  V  V
Heat pumps 200-400 Korunas  V  V - only air to air solutions  V
 Fireplaces  400 Korunas  X  X  V
Solar collectors 0 Korunas  X  V  V
Floor embedded heating 730 Korunas  X  V  V
Accumulation electric boiler 610 Korunas  V  V  V

To read additional important information before you purchase real estate properties in the Czech Republic – click here.

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