REAL ESTATE NEWS

Every 10th mortgage in the Czech Republic belongs to a foreigner

With over 380 000 foreigners living in the Czech Republic as long-term or permanent residents, there is a sharp increase in foreign investments in the residential and commercial real estate sector. Many foreigners are from the Slovak Republic and they along with the Western Europeans and the Americans prefer purchasing properties through mortgages. On the other hand, the Russians and people form the Asian Countries very often pay cash for the properties they acquire.

Americans, Germans, UK citizens, Israelis and French are interested largely in properties throughout Prague but recently the market has expanded to other large cities such as Brno and Ostrava. For over 15 000 Russians living in the Czech Republic, Prague is the prime target for property acquisition with an increasing number of properties acquired in Karlovy Vary.

The acquisition of real estate properties among foreigners has gone far beyond the need for place to live and work. With good business climate, wide selection of mortgage possibilities as well as the rapid expansion of real estate development many foreigners invest in several properties, which they later rent to third parties. Very often investors purchase old, classical apartments in attractive areas, they renovate and re-sell them for profit. This trend is moving beyond the Czech capital. There is an increasing number of properties sold to foreigners in Brno, Ostrava, Karlovy Vary and resorts like Liberec.

On average, every 10th mortgage in the Czech Republic was attributed to a foreigner. This is almost 100% increase in the number of mortgages issued to citizens of other countries compared to 2006. The average mortgage issued to foreigner was 1,7 million CZK.