Postcard from Prague: ‘Still good value compared to other European hubs’

LeadingRE member Filip Sejvl of Czech luxury property agency Philip & Frank talks us through property market trends in Prague and beyond, as published by PrimeResi (subscription).




By Filip Šejvl, Founder and CEO of Philip & Frank s.r.o, a member of Leading Real Estate Companies of the World


The current residential real estate market in Prague and the wider Czech Republic offers an encouraging mix of stability and anticipation for what is to come, writes Filip Sejvl, Founder and CEO of Philip & Frank and member of LeadingRE. The average new home price per square metre is approximately 140,000 CZK (c.£4,830), reflecting a market that has remained resilient despite facing challenges – and still good value compared to other European hubs.

While the country grapples with high-interest rates of around 6%, and a decline in the number of property sales, Prague’s real estate prices have remained consistent in the past 12 months. The expectation for 2024 is more activity, with an anticipated decline in interest rates expected to lead to an increase in sales and property prices.

In terms of property types, Prague’s unique character as an old historic European city has a considerable influence on the market. Attractive condos in typical historical buildings are the most sought-after homes within the city, while single-family homes and modern apartments dominate the suburban areas.

Buyers in Prague often prioritize specific features and amenities, such as open-plan kitchens, smart home technology, and built-in storage solutions. The city’s compact layout, characterized by narrow streets and a busy downtown, emphasizes the importance of having amenities within walking distance to avoid traffic congestion.

Several trends shape the wider Czech real estate market. Over the last five years, home prices in the country have risen by a substantial 64%. The recent increase in interest rates, coupled with a decrease in demand for property purchases in Prague, has created pressure on the rental market. Czechia stands out with a high percentage of people living in their own homes, but the current pricing trends may influence this dynamic.

One notable trend is the emergence of large real estate funds focusing on the rental market, with a focus on building expansive rental residential areas and apartment buildings.

Foreign investment plays a significant role in the Czech real estate market, particularly in Prague. The city’s historical monuments, rich culture, low crime rates, and robust tourism make it attractive to investors from Western European countries such as Germany, Italy, and France. However, there has been a shift in recent years, with Russian investors withdrawing from Prague due to the ongoing war in Ukraine. For foreign buyers considering investing in the area, the advice is clear: focus on properties in the famous and historic downtown area of Prague, as prices are expected to remain stable or even increase further.

Although no significant legislative changes regarding real estate transactions are anticipated in Czechia, potential regulations for short-term rentals of apartments or condos, similar to those imposed on hotels and accommodation services, may emerge in the near future.

The allure of living in Prague is multifaceted. The city’s rich culture and history, coupled with an efficient public transportation system and low crime rates, make it an amazing place to call home. Compared to other major Western European cities, Prague still boasts attractive property prices.