Home hunt in the Czech Republic: a restored gem in the historic heart of Prague

This two bedroom apartment is on the fifth floor of a historic building on Parizska Street, a historic strip of Art Nouveau design and upscale boutiques in central Prague. The 1,260 square foot home, built in 1907 and remodeled in 2012, is fully furnished with mostly custom pieces.

“This house is special because of its unique location,” said Jan Kolar, broker of the Czech Republic Sotheby’s International Realty, which owns the list, adding that it “stands out for its blend of Art Nouveau architecture. and historicism, and its dominant tower at the front that no visitor to Parizska Street can miss.

The work done in 2012 was a complete rebuild, Kolar said, including “everything from creating the current layout, new floors, new bathrooms, new pipes, new electrical cables, to furniture. integrated to measure, in the kitchen, in the mural. , wallpaper, decorative ceilings, ”he says.

The entrance hall, with a half bath, is in the center of the apartment. The living room, dining room and open kitchen are to the front, with Macassar ebony floors and large original windows (also restored in 2012) facing the street. A wood-framed glass sliding door separates the dining area from the living room, which has built-in shelving. The kitchen has quartz countertops and Miele appliances, as well as a door to a balcony.

A small hallway with a cupboard leads to the two bedrooms, both with en-suite bathrooms. The small bedroom has a balcony.

Several updates have modernized the apartment while preserving its historic appeal: the entrance hall has a Venetian mural and the crystal chandeliers are by the Czech brand Preciosa.

Parizska Street runs through the heart of Prague, the capital of the Czech Republic, from the Old Town Square to the Vltava River. Shops and restaurants line the thoroughfare, and historic sites are all around, including the 14th-century Charles Bridge, the 15th-century Prague Astronomical Clock, and the city’s Jewish Quarter. Prague Václav Havel Airport is 20 to 30 minutes away by car.

Prokop Svoboda, co-founder and managing partner of Svoboda & Williams, Christie’s wholly-owned subsidiary for the Czech Republic and Slovakia, described the Prague real estate market as resilient during the pandemic thanks to a combination of factors, including low interest rates , the repeal of a land acquisition tax and a reduced housing supply.

“The coronavirus crisis has slowed growth in many economic sectors, but the Prague real estate market has been resilient throughout the year,” he said.

Prices in Prague, as in the rest of the country, increased steadily between 2010 and 2019, according to the Czech Statistical Office, with more accelerated growth from 2016. By 2020, prices had risen 51 percent from their 2010 levels, far exceeding wage growth. According to a 2020 study from the financial consulting firm DeloitteCzech buyers have to pay 11.4 times the average annual salary to buy a 750 square foot home, the highest rate in Europe.

Peter Yusufi, Managing Director of Sotheby’s International Realty for the Czech Republic and Slovakia, said buyers in Prague, as elsewhere, view real estate as “a safe bet in the face of global fears of inflation” and devaluation of the currency. change. This, along with increased demand for second homes and investors recovering “large rental housing portfolios,” led to increased demand for real estate during the pandemic.

The repeal of the tax on real estate transfers last year, triggered by the pandemic, has further boosted purchases. Previously, buyers paid 4% tax on the purchase price.

Meanwhile, mortgage rates fell below 2%, according to a fourth quarter investment report from Necklaces, leading to a record number of mortgages approved in 2020, even as prices continued to rise. Now these rates are starting to rise again: “Some banks have started slightly raising interest rates on new mortgages in hopes of slowing demand given the record prices,” Yusufi said.

Mr Svoboda said a chronically slow building permit process was behind the low supply. “On average, it takes nearly 10 years for developers to get a building permit,” he said. “The streamlining and acceleration effort has been halted due to the coronavirus crisis, and developers started construction of just 3,246 apartments last year, down 40% year-over-year. ‘other.”

A new law aims to speed up the construction process, but “many experts agree that the new building law is certainly not perfect, so it remains to be seen how it will affect the construction process,” he said. he declared.

Yet buyers are choosing to invest in real estate rather than putting their money in savings accounts.

“The demand is so high that the projects are sold before they even go public,” said Pavel Parizek, managing director of CZECH POINT 101, a real estate agency specializing in investment property, adding that his company “has a list of investors. who want to buy, and we give them the properties before we advertise them. “

There are other factors that keep supply low and prices high. On the one hand, the pandemic has left many of Prague’s 13,000 short-term apartments empty with no tourists to fill them up, said Filip Sejvl, owner and managing partner of Filip & Frank, a luxury real estate agency in Prague. Many of these units have been converted to long-term rentals, which has lowered rental prices by about 15 to 20 percent, and in some cases as much as 50 percent.

Even then, the owners retained their rental properties. “They are waiting for the return of the tourists,” said Mr. Sejvl.

Based on data from the Czech Statistical Office and Deloitte, Mr Sejvl estimated that the average price for a new apartment in Prague was 114,000 crowns per square meter ($ 505 per square foot) in January 2020 and of 123,000 crowns per square meter ($ 545 per square meter). foot) in April 2021.

The most expensive area is the central district, Prague 1, much of which is a UNESCO World Heritage Site. Houses live there on average about 203,000 crowns per square meter ($ 900 per square foot). Just south of Prague 2, the average is Kronor 169,000 per square meter ($ 750 per square foot), Sejvl said.

Popular areas outside the capital, where shoppers are looking for second homes, include the town of Cesky Krumlov, the town of Karlovy Vary, known for its mineral thermal springs, and the Spindleruv Mlyn ski resort, Mr. Yusufi.

Mr Svoboda said that in 2020, 78% of buyers for his business were Czechs, with the remaining 22% mainly comprising Slovaks, Russians and Italians.

Mr Sejvl said buyers came mainly from countries bordering Slovakia, Germany and Austria, as well as Italy, the Netherlands, France and Great Britain. Outside the European Union, they come from Russia, Ukraine, the United States, Israel and Vietnam. About half of the buyers of his business are foreigners.

Mr. Yusufi said that, historically, Prague has served as a destination market for buyers from Russia, China and Vietnam. “We are now seeing the second generation of Vietnamese immigrants born and educated in the Czech Republic entering the real estate market,” he said. “These buyers have significant purchasing power and have proven to be savvy investors.”

Monika Rutland, managing partner of Rutland & Partners, a Prague law firm, said the properties are sold in Czech crowns but may be listed in euros for the luxury market. (The Czech Republic joined the European Union in 2004 and must eventually adopt the euro as its official currency.)

Foreigners can buy real estate in the Czech Republic without restrictions, but it is more difficult for non-residents to obtain a mortgage. “The banks have introduced stricter rules, and basically if you don’t have income from residence and employment in the Czech Republic it’s almost impossible to get a local mortgage,” she said.

Czech; Czech crown (1 crown = 0.48 USD)

The annual property tax on this apartment is $ 140, and the monthly condo fee is $ 600, Mr. Kolar said.

Jan Kolar, Czech Republic Sotheby’s International Realty, 011-420-721-645-703; sothebysrealty.com

For weekly email updates on residential real estate news, sign up here. Follow us on twitter: @nytrealestate.

About Frances White

Check Also

Remarks by Undersecretary of the Treasury Wally Adeyemo at the Brookings Institution

As delivered Thank you all so much for being here today, and to David and …

Leave a Reply

Your email address will not be published.