Prague property loses foreign players

Prague property is losing its foreign players, according to the city's main radio station.

The country, which previously attracted buyers from Russia, Vietnam and other EU countries, has seen overseas demand drop off, leaving prices to also fall. According to last year's census, only 10 per cent of the Czech capital's population is foreign, with most of those labourers unlikely to invest in real estate.

Charles Recknagel, who recently bought an apartment in the town, told Radio Prague that prices across the company are now 17 per cent less than five years ago, when he last searched for property:

"Before that time, the prices were climbing and became unaffordable when combined with the falling dollar. So I began again about two years ago when the prices collapsed world-wide, and the crown began to gain a little strength against the dollar again. I looked intensively for about a year but since I was interested in this several times over the past decade, I knew what area I wanted to look at, and I knew how to go about doing it."

But while buyers such as Charles are taking advantage of the affordable prices, property sales are slipping. One portal reports a decrease in transactions of 15 per cent compared to the same time last year, despite supply levels rising:

"This time last year, our website offered around 151,000 properties," explains Czech portal Reality Mix. "Today, we have 170,000 properties on offer, and it's not because we would have more agencies advertising on our site but because there are some 20,000 more flats on sale and for rent."

The difference comes from the absence of foreign investment groups, who would buy large amounts of real estate in new developments. Now, property sells to individuals, and while the market is deemed friendly for foreign investment, most buyers in the market are Czech.

"Recently, over the last two or three years, we have seen a declining trend. Buyers have increasingly higher demands but that doesn't mean real estate gets sold to foreigners," comments Home Sweet Home, an agent that specialises in foreign clients. "In 2008 and 2009, some 70 percent of our business was with foreigners, now 70 percent of our clients are Czech. At the same time, the structure of our foreign clientele has changed. They are now mostly Russian and Italian who are based in Prague but also the English and Irish."