Increasing numbers of Czech investors are purchasing prefabricated apartments

Post date: Apr 07, 2016 8:16:24 AM

Increasing numbers of Czech investors are purchasing prefabricated apartments

The number of Czechs who choose to invest in prefabricated apartments in Prague as a second apartment for investment purposes is on the rise, the financial paper Hospodářské noviny reports. According to the paper, the price of prefabricated apartments, once favored by the communist regime, is roughly half that of brick houses and the rent in the cheaper apartments is about 75% of the average monthly rent.

According to the financial paper Hospodářské noviny the interest in prefabricated apartments, locally known as panelák is growing. The interest is primarily not in first property purchasing but as a second property purchased for investment purposes, and promising a high return on investment. Prefabricated apartments are considerably less expensive from the older brick built buildings and are roughly 50% cheaper. On the other hand, the monthly rent for prefabricated apartments in Prague, states the paper, quoting one of the managers of the largest real estate site in the Czech Republic is a bit more than two-thirds of the monthly rent of their brick built counterparts, ensuring a relatively rapid return on the initial investment. The field of real estate, generally considered a relatively safe market, remains attractive although it must be mentioned that prefabricated buildings bear a certain risk: that is why it is preferable to invest in sites that have already undergone renovation in order to minimize the chances of running into unexpected surprises.

Which prefabricated apartments are most desirable?

It is no surprise that apartments located near public transportation routes- and particularly metro lines- as well as parkland and other green zones, are among the most attractive properties. The paper quotes a Remax real estate agent who mentions, in this context, parts of stodulky. Many buyers invest in small, one-room apartments, called garsonky. Interest in small apartments for rent exists outside of Prague as well, but it is especially apparent in cities such as Pilsen because it is very easy to rent out an apartment in a university town. According to the paper, the highest interest as of this moment in in the Karlovy Vary area.

Will buyer interest in panelák apartments continue?

According to the financial paper, interest in the past few months has already led to a certain rise in prices; should this trend continue, the options for investment will become less attractive over time; furthermore, the supply of prefabricated apartments is projected to dwindle. There is already a 2% decline in supply since 2015, according to the paper, and this means that some of the more attractive options will eventually disappear.

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