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Investment Overview

The Czech Republic has one of the most successful economies of the former–Communist countries of Central Eastern Europe, having enjoyed solid growth since the beginning of the decade. However, it was the country’s accession into the EU in 2004 that prompted the surge in popularity of investment property in the Czech Republic. The property market is not heavily dependent on tourism, as many others are. Instead, the demand for investment property in the Czech Republic comes from its residents, who are benefiting from the country’s growing economy, rising employment and the resulting growth in purchasing power they are experiencing.

Property market

The greatest demand for investment property in the Czech Republic is for apartments in the cities. The country does not have a large tourism industry, nor does it attract many second–home owners or ‘lifestyle’ expatriates. For this reason, potential buyers of property in the Czech Republic are advised to focus on the source of the main demand for property – the domestic market – and the type of property that would be most sought after in this market. The cities have welcomed large multinational corporations to set up bases and this has increased employment and the average salary of Czech residents. In addition to this, interest rates are low and mortgages have become more accessible, so the domestic demand for property has risen significantly.

Investment strategy

There is a supply of modern apartments of a high standard and conveniently located in the main cities, which many investors believe will be in demand both as long–term rental properties, and on the resale market. Their strategy for investment is therefore to buy a modern, high quality property with a view to having a market for rental or resale among the newly well–off Czech residents. However, some experts warn that there is a surplus of luxury apartments in Czech cities. These high–end properties were originally taken on by the small minority of mainly expatriate workers who paid a level of rent previously unheard of in the country, while the majority lived in rent–controlled apartments. Since many of these expatriate professionals have, over time, been pushed out of their jobs as employers have taken on lower–paid Czech workers, many luxury apartments lie empty in the city, while the demand remains high for the lower end of the market.

Related items

Documents and Reports

	Czech Republic property investment report (360Kb)
Documents and Reports

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