HN: More foreigners buying Prague flats as homes rather than investments

The percentage of Czech apartments bought as investments has grown in recent years. But simultaneous with that has been a rise in the number of foreigners acquiring flats as homes, particularly in Prague, Hospodářské noviny reported.

Photo: Gerd Altmann, Pixabay, CC0 1.0 DEED

Many of these buyers are Western Europeans who are planning to live in the Czech Republic at some stage. This is in contrast with those, particularly from the UK and Ireland, who snapped up apartments as investments prior to the global financial crisis of the late 2000s, the business daily said.

The director for residential projects at Prague property company PSN, Marek Padevět, told HN that demand from abroad was rising constantly, with the Czech Republic being seen internationally as a safe country where jobs were available. Mr. Padevět said Germans and French were among the new wave of buyers.

Milan Roček of mortgage brokers Hyposervis told the newspaper that the young British and Irish investors who in the past bought Prague properties with a view to making a killing ended up having to sell them off en masse when their own countries’ economies were hit hard by the financial crisis.

In the mid-2000s representatives of British investors would buy up to 30 percent of the flats in new developments, Mr. Roček said. Today, by contrast, the trend is for regular people from Western European states to buy apartments with a view to spending their retirement in Prague.

These include Italians and Austrians, whose pensions will go further in the Czech Republic than in their own countries, Mr. Roček told HN.

In the last two years between 30 and 40 percent of the apartments bought in Prague have been purely investments, the Hyposervis representative said. A great many of these buyers are Czechs.

Finep, one of the biggest residential developers in the Czech capital, also estimates that between 35 and 40 percent of its newly built properties are bought as investments. When it comes to older apartments around 15 percent are investments, the company told HN.

Ten or 12 percent of Finep’s new flats are bought by foreigners, most commonly Slovaks, followed by people from neighbouring states, primarily Germany, spokesman David Jirušek told the business daily.

Finep has also registered interest in new properties from the UK, on the back of Brexit, as well as the US and Israel.

The number of buyers from the former Soviet Union has been falling for a number of years due to sanctions on Russia and the decline of the ruble.