Is purchasing an apartment in Prague is still a profitable form of investment?
Rentals and prices of new apartments in Prague are still growing. There are several reasons that are mutually connected. The economy in the Czech Republic experiences a growing trend, but the availability of own housing is deteriorating due to the worsened mortgage conditions by the Czech National Bank. Especially young families and individuals are forced to stay in rental housing due to the current situation. Another negative factor is the fact that housing construction in Prague is stagnant. The average prices of newly built apartments exceeded 90,000 CZK per square meter last year, over the past two years the price increase is almost 40%. Older flats are still lacking in Prague, so their value is up to two-thirds more expensive than they are in other regions. At the same time, a relatively high number of people moves to Prague, multinational companies relocate their employees, and the combination of all these factors leads to the fact that people remain in rental housing – that raises the demand and leads to higher prices of rents.
Apartment 4+kt in Devonská Street, Prague 5 – Hlubočepy
Existing owners have the ideal conditions to obtain a suitable tenant for relatively high rents. Assuming the owner owns a quality property in an attractive location and sets a reasonable price, he can expect a large number of candidates and then choose the most appropriate one. Those who consider investing in real estate for subsequent rentals cannot expect extremely high returns (due to rising purchase prices), but they are still well-stored resources. Influence of profit can, of course, be rised by high standard equipment of the flat, which makes it possible to require higher rent, but it is necessary to take all costs into account. Currently, Prague expected return is min. 3% and the main condition is surely the location. The highest prices for rent are in the historical center, in Prague 1 and Prague 2, but popular locations are also Prague 7 – Holešovice, Prague 6, the villa area in Prague 5 or Prague 8 – Karlín. The demand for rent in Prague is about 60% Czechs and 40% foreigners. The biggest interest is usually for flats 2+kt/2+1 and, in general, small-size apartments.
An alternative and very popular option in the above-mentioned locations is short-term rent, which is economically more profitable and has been experiencing a boom in recent years. Due to the high price of apartments, for example, in Prague 1 it is not worth paying an apartment as an investment for classic long-term rent. Higher yields, however, also entail higher costs not only for routine maintenance but also for the service provided, which many owners considering this variant are unaware of. There is quite a lot of duty to do. In addition to the payment of taxes during the annual earnings (which is more than 30 000 CZK), it is for example an obligation to report the guests from countries outside the EU foreign to the police, draining local taxes (spa or recreational fee and accommodation capacity) and the operator must have a given the purpose of owning a trade. In some months, the operator must also expect lower occupancy (January, February, November). Therefore, it is necessary to carefully consider what kind of rental is in the given situation and for the property most advantageous, whether to invest in short-term rent or prefer a long-term – reliable and stable paying tenant.
Do you need an advice on your investment or are you looking for or offering a rental in Prague? Contact our residential lease and relocation specialist in – Ing. Zdeněk Jemelík: +420 720 310 300 | email@example.com.
Life & style
30. 6. 2022
The interest in holiday properties in the country is not waning. However, their supply is completely insufficient after almost two years of boom. This, together with the rising price of building materials and labour, is reflected in their high prices. The new project Apartments Albeřice with 11 design units, which is growing in the mountain village of Horní Maršov - Dolní Albeřice in the Krkonoše Mountains, should help to satisfy the enormous demand. The exclusive sale of luxury apartments has now been launched by our real estate agency Luxent - Exclusive Properties! The construction of the low-rise building is expected to start towards the end of this year, with completion planned for the 4th quarter of next year.
16. 5. 2022
Are you dreaming of a new exclusive property near Prague, but at the same time close to nature? Now we have launched the sale of luxury houses in the second phase of the development project Březový háj, which is growing in the village of Předboj. It includes 4 original family villas of 6+kk and 7+kk with gardens, terraces and swimming pools - and their construction has already started! Despite the situation on the real estate market, where, among other things, prices are rising due to a shortage of building materials, interest in the project is huge. Of the sixteen houses in the first phase, only the last one is currently available for purchase. Their implementation will be completed at the turn of this spring and summer, and the entire project with the second phase should be completed in the summer of 2023.
9. 5. 2022
The steep rise in real estate prices, the rising cost of mortgages and the deterioration of their availability, inflation, the rise in prices of building materials and the shortage of building materials - this is the current situation on the real estate market. However, even this does not discourage those interested in luxury housing or a profitable investment. The demand for new flats, especially in Prague, still significantly exceeds the supply. The huge interest is also evidenced by the fact that in many development projects from our portfolio the last units remain to be purchased. In order to at least partially satisfy the "hunger" for luxury new buildings, work is in full swing. Let's take a closer look at the current developments!
15. 3. 2022
The interest in real estate, especially recreational ones, is still enormous. However, since the domestic supply is not able to cover it, Czechs are now turning their attention more and more abroad, for example to Slovakia. A development project called Marina Liptov, which comprises 33 modern apartments in layouts from 2+kk to 4+kk, is growing right next to the Slovak dam Liptovská Mara on the Váh River under the Tatra Mountains. They offer the possibility of active relaxation in their own facilities in a popular Slovak recreational location as well as the opportunity for a promising investment in an apartment. The project should be completed by the end of next year. Our Luxent - Exclusive Properties office has become the exclusive partner for their sale in the Czech Republic - let's take a closer look now!
19. 1. 2022
Winters are relatively mild in our area, but if you have a warm heart, you may miss the sunshine during the cold months. And if you experience these feelings every winter, you might want to consider investing in an apartment in a warm climate. Find out what's trending right now and which luxury properties abroad you can choose from in this article!
12. 1. 2022
Do you want to go skiing or cross-country skiing? Wondering where to spend your spring break with family or friends? Get yourself a holiday property in the mountains! You will see that you can choose from our range of exclusive properties in renowned domestic resorts in no time.
3. 1. 2022
It can already be said with certainty that 2021 will go down in mortgage history as a record year - whether in terms of the volume of mortgages arranged due to huge interest or above-standard interest rate increases. We will now take a closer look at the various factors that have shaped the mortgage market in recent months and will also be reflected in the period ahead.
28. 12. 2021
The luxury segment, comprising unusual properties in prestigious locations, forms a distinctive part of the residential market. And it has its own special requirements. Properties that are the focus of our real estate agency Luxent - Exclusive Properties require professional brokers with perfect knowledge of the specifics of this market. They will now take you on an excursion into the world of exclusive real estate with a few selected, untouched gems!
2. 12. 2021
The jewel of our real estate agency Luxent - Exclusive Properties' portfolio are two building plots with building permits for luxury house development projects - Nad Šáreckým údolím in Prague 6 and Zahrada snů in Prague 8. The common feature of the buildings is the emphasis on the highest quality materials and equipment, the pursuit of maximum energy efficiency and also a sensitive setting in the space that honours the genius loci. You can start building your home as soon as you purchase the land. You'll also appreciate the fact that both have now seen a significant price adjustment!
10. 11. 2021
In the popular Krkonoše resort of Harrachov, an intimate project Harrachov Peaks is growing, which includes 16 unique units, including three exclusive penthouse duplexes. Our real estate agency Luxent - Exclusive Properties has launched an exclusive sale of luxury apartments with layouts from 1+kk to 4+kk. But don't hesitate for long, the huge demand for holiday properties is definitely not going to subside! Mountain residential house offers the possibility of a second home in nature and at the same time an investment opportunity. The project is scheduled for completion in December next year, and you can look forward to the handover of the units in January 2023.