Where do you earn the most for an apartment investment? Forget about Prague
For many possible surprises. Whenever we talk about real estate, Prague appears with astronomical housing prices in the first places. From the point of view of investment in flats, however, it did not appear in the top ten at all.
Cities, especially in the north of Bohemia and in the Moravian-Silesian Region, are much more interesting in terms of evaluation, the latest ranking of Valuo published in the Forbes magazine showed.
If someone has an excess of one million crowns, the forced shares do not smell and they look for a suitable property, Chomutov should not escape his attention. The average forty-meter apartment in a statutory town in the Ústí nad Labem Region is sold for 775 thousand crowns, and an annual yield of over ten percent can be expected.
In the north of Bohemia, flats are still sold well below cost, and in the coming years they promise a jump in value. Years ago, it was different. Prague, České Budějovice or Hradec Králové were at the forefront of investor interest.
Today, the top five places in the ranking belong to cities in northern Bohemia and Silesia. After Chomutov, buying an apartment in Ústí nad Labem, Ostrava, Karviná and Frýdek-Místek pays off the most. You can find other cities in the table. The ranking takes into account the location of cities in individual categories according to the size and condition of the advertised apartment.
In Chomutov, the return on investment in the apartment is nine years, in Karviná eleven years and in Ústí nad Labem twelve years.
Where it pays to invest in an apartment the most | |
---|---|
1. | Chomutov |
2. | Usti nad Labem |
3. | Ostrava |
4. | Karvina |
5. | Frýdek-Místek |
6. | Mlada Boleslav |
7. | Carlsbad |
8. | Jablonec nad Nisou |
9. | Opava |
10. | Zlín |
Prague does not figure in the top ten with a return of about thirty years of investment. In the capital, a new mortgage is often not paid for, and for investments it is necessary to count on a long-term horizon and choose a good location.
Investing in flats offers an interesting opportunity in all regions, even during the covid. The reason is also slow construction, which limits supply, and on the other hand still cheap housing loans. Prices in Prague in the pandemic even reached over one hundred thousand crowns per square meter, according to a comparison of the Bezrealitka portal.
While the price per square meter in Prague was almost 105 thousand crowns at the beginning of the year, in the cheapest Ústí nad Labem region the meter was sold for 25,819 crowns and in the second cheapest Moravian-Silesian region for 33,145 crowns.
In addition to Prague, Brno is the least interesting in terms of return on investment in terms of return on investment.
Slow construction
According to some real estate experts, apartment prices are still due to insufficient supply, which is due to slow construction. The Czech Republic ranks 156th out of 190 countries in the World Bank in terms of speed of building permits. The problem is not just about Prague.
The new building law, which was approved by the Chamber of Deputies in mid-July when it overruled the Senate veto, promises to speed up construction.
However, it is uncertain whether the savage real estate market will calm down. “As long as the authorities are set up to prolong the proceedings as long as possible, we will not see any change. Then we can’t divide that real estate prices are constantly and do not yet know the ceiling, “says real estate expert Tomáš Wildt from the investment company Vihorev Group.
“The desperately slow process of obtaining building permits definitely helps to ensure that the current demand for new housing significantly exceeds the supply. That is why I do not see a chance for prices to fall in the foreseeable future, “adds Jaroslav Nedvěd from RE / MAX Anděl.
In the long run, it expects rental housing to grow at the expense of owner-occupied housing, as many people fail to obtain credit due to high housing prices and the bank’s strict conditions.
In June, for the first time since February 2020, the Czech National Bank raised the key interest rate, which is the price of mortgages in commercial banks. She could repeat the step twice more this year. Housing loans will therefore be less attractive to people.