Residential Sales

In the past, banks have been generally slow to offer easily available and affordable mortgages, although more recently a number are now seeing the potential in the development of the housing market and are developing and offering an increasing range of mortgage finance products. These new trends are making the property market more accessible to the Czechs. Interest rates for mortgages have fallen to 4.5 -6%. Currently, the demand from the local population continues to be strongest at the middle of the market. However, as people become less dependent upon cash purchases, a strengthening demand at the mid to upper price bracket is anticipated to occur.

In the past few years, there has been an increasing focus on mid priced apartments. This is demonstrated by the increasing number of new projects scheduled for development in the 32,000 to 39,000Kč/m2 price range. The Czech market continues to lag behind western Europe in residential developments as only 2,5 - 2,8 apartments per 1,000 inhabitants are being built annually compared to figure for Europe with between 4 and 5 apartments per 1,000 people on average. However, this is rapidly changing.

Apartment in new developments aimed at the middle of the market are priced in the range of 28,000 to 39,000Kč/m2 with some variation depending upon specific location and the standard of finish. The quality of new space still shows a degree of variation, however, as in other market sectors, the last year or so have shown a general increase in the standard of properties offered to the market as purchasers are becoming more discerning. For newly renovated apartments in the popular central areas of Prague and in some of the more sought after non-central districts such as parts of Prague 2 and 6, prices are typically between 60,000 to 75,000Kč/m2. In the most desirable locations like Staré Město and Malá Strana, prices in excess of 120,000Kč/m2 can be achieved for very high quality property.

Residential Rentals

At the upper end of the market, the influx of expatriates has slowed in recent years, but this has been at least partially offset by the increasing number of Czechs who are attaining the positions formerly occupied by foreigners. In addition, there is still a degree of circulation of upper level managers. Demand from this market segment continues to focus on the areas of Prague 1, 2 and 6.

Typical Rents:

Prague 1   14-20 EUR/m2
Prague 2   12-16 EUR/m2
Prague 3     7-12 EUR/m2
Prague 4     7-12 EUR/m2
Prague 5     7-12 EUR/m2
Prague 6   10-16 EUR/m2
Prague 7     8-12 EUR/m2
Prague 8     7-10 EUR/m2
Prague 9     7-10 EUR/m2
Prague 10   7-12 EUR/m2

Commercial Rents

The Czech property market is increasingly attractive for foreign investors. Office space is growing steadily while a major government program designed to support the development of municipal industrial zones has boosted the availability of space for production facilities. An increasing number of large international and Czech developers are actively seeking sites to create new industrial, logistics and business parks.

The market for office space has stabilized, especially in Prague where rents are at a similar or lower level than in comparable European cities. The market is growing fast and ample office spaces in various categories are still needed.

Average rent (EUR/m2/month)

PRAGUE	A CLASS (Highest standard)	B CLASS (Standard)
City Center	16-20	10-15
Outer City	14-17	8-12
Suburbs	-	7-10

Note: If renting a larger space or if entering into a long-term agreement, lower rents can be negotiated (approx. 5 – 10 % discount).