Despite interruptions to the world’s supply chains and the uncertainty that the Russian invasion of Ukraine has caused for the economy, the Czech Republic’s property market is still quite strong.
According to the Czech National Bank, the average price of flats increased by 26.3 percent (13.5 percent inflation-adjusted) in the year to Q1 2022, following increases of 25.8 percent year over year in Q4 2021, 22 percent in Q3, 14.6 percent in Q2 and 11 percent in Q1 (CNB). In fact, since the series’ inception in 2008, it represented the largest y-o-y growth.
Local house price variations
The most expensive apartments in the capital city in 2021 were found in Prague 1 and 2, with average prices of CZK 166,200 (US$6,992) and CZK 145,100 (US$6,104), respectively, per sq.m. They were followed by Prague 3 and 7, with an average price of CZK 123,800 (US$5,208) and CZK 120,600 (US$5,073), respectively, per sq.m.
On the other hand, Prague 8 and 4 had the cheapest homes in the city, with average prices of CZK 105,500 and 106,300, respectively, per sq.m.
According to Deloitte, apartments in Brno, the country’s second-largest city, will typically cost CZK 89,600 (US$3,767) per sq.m. in 2021. The average cost of a flat in Olomouc grew to CZK 60,300 (US$2,535) per square meter from 77,100 (US$3,242) in the Central Bohemian region.
The cheapest housing in the country is in St. nad Labem, which is in northern Bohemia. In 2021, the average price of a flat there will be CZK 37,300 (US$1,567) per sq.m. Karlovy Vary, which is close to the German border, will cost 41,400 (US$1,739 per sq. m.), and Ostrava, which is in northeastern Moravia, will cost CZK
Poor rental yields: foreigners buy-to-let
Gross rental yields or the return-on-investment property would receive if it were entirely rented out before any costs, are low in Prague. Despite some places having greater yields, apartments typically have gross rental returns of less than 3 percent, according to research done by Global Property Guide in March 2022. The most expensive city in the Czech Republic to buy or rent a home in Prague, the capital city. The prices per sq.m. there range from EUR 4,000 to EUR 6,000. (sq. m.).
Prague 2
Apartment prices average €6,335 per square meter (sq. m.), a popular area for ex-pats with easy access to the city center, and rent is about €16 per sq. m., producing a 2.94 percent rental yield.
Prague 1
A 60 square meter (sq. m.) apartment there costs approximately €6,799 per sq. m. and rents for €15 per sq. m., resulting in a 2.32 percent rental yield. Prague 1 and Prague 2 are where you can find the priciest apartments.
Prague 5
Another area that attracts ex-pats is Prague 5, one of the city’s major districts. Typically, a 60 square meter (sq. m.) apartment in this area costs €4,991 and rents for €14 per sq. m., yielding a 3.29 percent rental income. Compared to the city center, these apartment prices are significantly more reasonable.
Prague 6
The largest neighborhood in the capital city. It has a highly expensive cost of living. However, some options are more readily available, such as a 60 square meter (sq. m.) apartment that costs about €4,895 and rents for €12 per sq. m., resulting in a 2.76 percent rental yield.
According to CNB estimates, current yields are significantly lower than those between 2000 and 2005, when the average rental yield in Prague was 6.8%, or almost 10.8% in Ostrava and “st nad Labem,” and 7.8% in the rest of the Czech Republic.
According to the Global Property Guide, rent for apartments in Prague ranges from €11 to €20 per square meter per month. The five cadastral districts in Prague with the highest rentals are Vinohrady, Malá Strana, Josefov, and Staré Msto (Old Town).
Foreign buyers are now beginning to return to the market to acquire houses for investment purposes as the situation begins to normalize. Russians or Czechs make up a sizable percentage of the luxury market.
