The coronavirus pandemic has reduced interest in travel, which is paid for by short-term homeowners and accommodation services such as Airbnb in addition to hotels. Also, they are not covered by State aid in the form of the COVID accommodation program, which aims to compensate for the loss from forced closure. Often, other uses must now be sought for accommodation intended for only a few days. What are the options for the owner and which pays off the most?
Probably the most common solution is to change the rental period. According to data from professional portals, up to 45% of flats previously intended for short-term rentals have appeared in the offer of long-term ones since the spring of last year. According to the Czech Association of Private Accommodation Providers (ČAPUS), mainly those offered to foreign tourists have disappeared – in a year-on-year comparison, their offer decreased from 6,100 to 1,900 in October 2019. These flats should return to the market for foreign visitors in a year at the earliest, as follows from the analysis of the GarantovanyNajem.cz portal.
The increase in the number of long-term rental apartments was largely due to the decline in the average price per square meter. According to statistics from the Realitymix.cz portal, the rental price decreased by 11.3% compared to November 2019. In its analysis for the City of Prague, Deloitte states that the price per square meter is now around three hundred crowns. This is also confirmed by the owner of the Luxent – Exclusive Properties real estate agency Jiří Kučera: “Rental prices for the whole of Prague are around CZK 320 per sqm / month on average, before the corona crisis it was around CZK 350 per sqm / month. Further changes can be expected in the spring of this year when most of the currently concluded annual leases will end. However, in the current unfavorable situation, it can be assumed that a large number of these contracts will be further extended."
The main prerequisite for the transition to long-term leasing is to find suitable tenants. In addition to foreign clients, another large group that is currently not interested in renting is students. Due to distance learning at universities, the vast majority of them remain in their place of residence and thus do not need to find accommodation in Prague, for example. One of the peaks of the real estate season, which, thanks to this group of interested parties, usually comes in the autumn months, did not occur at all last year. Last but not least, there are also fewer foreign employees of multinational companies, who returned to their home countries or companies during a relatively large part of the pandemic. „For those interested in renting, the layout currently plays a role in the decision-making process. Smaller flats are mostly requested by young working individuals or couples, the larger ones by families with children, „ explains Jiří Kučera from Luxent – Exclusive Properties, adding: “Relaxed luxury flats in the center of Prague are mostly fully equipped, due to their earlier use for short-term rentals. Those interested accept this condition and prefer the equipped interior even in the outskirts of the city.“
However, some short-term rental properties require an adjustment to make them suitable for full-fledged housing. You can use the time caused by the loss of rent just to reconstruct the building. It is worth considering investing in an apartment, especially in the kitchen. The lines in typically short-term rented flats are usually smaller so that they are sufficient only for the most necessary cooking. But a mother from the family will rather appreciate more cooking hobs and a larger worktop. The question, in this case, remains whether the owner has sufficient financial reserves, which in this case he could invest in housing adjustments.
The most radical option is the sale of real estate. The investment in an apartment for rent is not small and some owners have financed it with a mortgage, for example. They are now unable to repay without a regular monthly rental income. But there is no danger of a lack of applicants. „The demand for apartments to buy in Prague is not declining in any way. In the long run, a huge number of them are missing and this deficit is not decreasing, bureaucratic barriers are preventing new construction. They will therefore continue to be absent and it is indifferent whether their buyers will be their future users or the investors who will lease them. Rental prices and sales prices will gradually rise,“ says Jiří Kučera, adding: „The further development of the situation with the spread of Covid-19 will suggest how the rental market for previously rented flats will change. The former form and scope of use of Airbnb platforms will not return for several reasons. On the other hand, it is only a small part of the rental market.“
If you are unsure about the current situation, consult an expert. Luxent – Exclusive Properties specializes in the luxury real estate segment. It provides its clients with a comprehensive service from financial and investment advice through the determination of the market price, presentation, and inspection of the property to the settlement of all official requirements and the actual implementation of the sale. It also offers rental housing services – ie all related services, including, for example, property management. Therefore, if you are hesitant between short-term and long-term rental, brokers can, thanks to their years of experience and market orientation, be able to advise you on the most suitable solution.
Source of the cover photo: https://www.pikrepo.com/…-aerial-view
Life & style
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.
8. 9. 2021
In an attractive location of Prague 5, on the border of Smíchov and Radlice, directly below Dívčí hrady, construction of an original and timeless development project - the Garden Lofts residence in industrial style has started. The building includes 22 luxury apartments with terraces, balconies or front gardens. They are now exclusively for sale by our real estate agency Luxent - Exclusive Properties. The project will be completed in the spring of 2023. The construction is being carried out by the renowned construction company Swietelsky.
11. 8. 2021
We have opened a model house in the exclusive residential complex Březový háj in Předboj, Prague-East. Most of the 16 luxury villas, including one bungalow from the first stage, are already sold or reserved. But do not despair! During this year we are going to offer for purchase 4 more houses from the second one. The exclusive sale of luxury homes is handled by our real estate agency Luxent - Exclusive Properties. The first phase is scheduled to be completed next spring, and the entire project is expected to be finished in late 2022/early 2023.
22. 7. 2021
Wondering how to spend your summer? Are you a lover of wine, cycling or hiking? Discover the 1,200 kilometres of wine trails in Moravia! You can choose from a total of eighteen circuits named after the main wine centres. The routes ingeniously connect interesting places and offer visitors day trips and multi-day trips full of exercise and first-class Moravian wine. Once you start with one, you'll want to try the others! Here's a selection of the ones you shouldn't miss, along with a few tips on luxury living.
15. 7. 2021
Luxent - Exclusive Properties offers comprehensive services in the field of luxury real estate. To work in such a specific market, our real estate brokers require, in addition to years of experience, excellent knowledge of the real estate segment, top know-how in marketing and sales support, as well as professionalism and superior client care. An exceptional example is Zdeněk Jemelík, who specialises primarily in the sale of residential properties and development projects and also provides advice on investment acquisitions and leases.
28. 6. 2021
Golf is no longer the domain of a select few who live in exclusive apartments and family villas. Golf tourism is becoming increasingly popular in the Czech Republic. It combines a passion for sport with visits to historical monuments or trips through beautiful countryside. So whether you are a seasoned matador or a beginner, you are sure to enjoy travelling in conjunction with golf! So where to go?
16. 6. 2021
Are you planning to buy an exclusive property? In addition to luxury apartments in Prague, family villas and commercial buildings, you can also choose from historic ones! In the Czech Republic, unlike Western European countries, we have monuments that have been relatively preserved, but during the previous regime it was impossible to buy them. Since then, they have been in great demand among businessmen and celebrities. They build private residences, company headquarters, hotels, spas, restore castle parks, vineyards or develop other agricultural activities on the land. Are you interested in how this unique segment works? Lenka Munter, a specialist at Luxent - Exclusive Properties, who has valued the properties of the British royal family for Forbes in New York, will guide you through the world of historic properties. The company currently offers several castles in its portfolio, including those in Světlá nad Sázavou, Encovany and Stružná.