Is an end to rising property prices in sight?

Property investment has been widely discussed in the media in recent months, and some experts have pointed out the many caveats now associated with buying an investment flat. The main problem is high mortgage costs, which make the whole transaction more expensive. However, those with their own financial resources who are looking for a safe way to invest them can be pleased. Property prices are not collapsing, and new opportunities are opening up on the market.

“Flat construction is continuing and property prices are still rising, although noticeably less than over the past two years. However, interest in rental housing is increasing, and that means only one thing. There are fewer prospective buyers for flats, while the queue of those who would rather rent is getting longer. In Prague and Brno, dozens of applicants are waiting for some rental flats, and the average rent is rising accordingly,” says David Novotný of the real estate company Bohemian Estates.

However, he points out that speed is now crucial for investors too. “The best flats are usually gone immediately, and it is precisely the best flats that will be easiest to let in the coming months and years. New-build flats with layouts of 2+1, 2+kk or 3+kk promise the highest returns. There is demand for flats both in Prague and the surrounding areas, as well as in towns with good access to the capital. People are not only willing to pay more for rent, but are also prepared to commute. Parking spaces are naturally a major advantage for flats, while the location – or rather the local amenities – is equally important.”

The problem is that flats meeting the above criteria disappear from property listings at lightning speed, sometimes without even making it onto them. This is where real estate agencies have an advantage. “Real estate agencies have exclusive representation for certain projects, so properties are offered to them first. They are also the first to access auction listings, which are often very attractively priced. As an investor, I would therefore first consider whether it would be worthwhile entrusting the purchase of a property to professionals,” adds Novotný.

Real estate representation also offers further benefits. Aside from the aforementioned head start over others, a real estate agency can help identify and, above all, thoroughly check a property. This gives you the assurance that you are not buying a pig in a poke and that the property is free from technical and legal defects that could cost a great deal of money in the future.

Another advantage is a comprehensive service and legal and administrative support. “We guide investors through the entire process. We find and inspect the property, deal with the legal aspects and assist with matters such as holding funds in escrow or communicating with the Land Registry (katastr nemovitostí). We can also often negotiate a discount. To do this, we use audit data, price maps and, of course, our experience. We know how to handle it. The commission is only paid once the property purchase has actually been completed, not before,” concludes David Novotný of Bohemian Estates.