Trends in Prague’s 2016 real estate market

Post date: May 09, 2017 12:58:14 PM

Trends in Prague’s 2016 real estate market 

The year 2016 is considered by experts as the start of Prague’s golden age of real estate.

The most attractive areas to invest in in Prague are presently Prague 1, 2, 3, 5, 9, and – 13. In these locations, and particularly in Prague 1,2 and the Vinohrady neighborhood there is no projection of a future decrease in prices- on the contrary, they are projected to rise. There are a number of additional districts that are also considered to be attractive for investment.

In 2017 the Czech purchase tax was placed on the buyers, rather than the sellers, which encouraged the sale of real estate assets and further ballooned the real estate market. In 2015 18% more new real estate assets were sold than in 2014, particularly apartments and ground level houses in the suburbs of the cities. This trend is expected to increase. The demand for real estate is a product of the Czech macro-economic situation (for example, parking space shortages in the center of the cities) and the low interest rates on mortgages.

As a result, apartment process in Prague are continuing to rise. The price of an average apartment in Prague was 3.5% higher in 2016 compared to 2015, and 7% higher compared to 2015. The expectation for 2018 is for prices to rise by an additional 12-15%, particularly midrange budget apartments in the center of the city that are walking distance away from the central streets and the shopping centers.

The lease rates in Prague have also risen. For example, in the first 3 months of 2015 leases had risen by 160,000 Czech Korunas per square meter and have reached an historic peak- 500,000 Czech Korunas for square meter. As Prague is a central European city businesswise, the prices of leasing commercial real estate assets in central business districts and malls is rising, particularly in Prague and the other major cities in the Czech Republic.

For additional information on real estate investment opportunities in Prague please contact us and we will be happy to advise you.