In the economically strongest regions of the Czech Republic, which traditionally include Prague, Brno and most of the Central Bohemian Region, rents continued to rise over the past year. Yet the pace was nowhere near the double-digit figures of the past. This is due partly to slightly stagnating demand and partly to low inflation, which has settled down after the shock of the energy crisis and the outbreak of the war in Ukraine.
Attractive Karlín is off the charts
Rent growth in Prague is therefore now rather cosmetic, although exceptions do exist. One of them is Prague 8, home to the popular, fast-developing cosmopolitan district of Karlín and to new properties on Rohanský ostrov, for example. This former brownfield is one of the most interesting opportunities to buy a property in an attractive location within walking distance of the historic city centre.
Double-digit rent growth and inflation are a thing of the past, so rents in Prague have stabilised
Nationwide, average rent around the turn of the year even fell, dropping 1.2% quarter-on-quarter to 332 Kč per square metre. This is above all a sign of seasonality and of weaker demand in the autumn and winter months. Incidentally, in the capital the figure stands at 459 Kč per square metre, i.e. 38% above the national average.
Vary attracts more than spa guests and swimmers
A major exception in the published statistics is the administrative and historical centre of the least populous Czech region – Karlovy Vary. This spa town, which at the turn of the millennium was inseparably associated above all with Russian clientele, is enjoying an unprecedented restart. People from many corners of the world are now showing interest not only in short-term stays, but also in rentals and investment properties in Karlovy Vary. They come, for example, from the Middle East or from Central Asian countries that were once part of the Soviet Union. Demand from Armenia and Azerbaijan is growing as well.
The period of decline is behind Karlovy Vary; the town is once again on the radar of tourists and investors alike
In connection with this transformation of Karlovy Vary, there is currently talk of a huge investment in the local airport, which could follow the example of Pardubice and pass under army administration, becoming an institution with combined military and civilian operations. A billion-crown cash injection would mean widening and extending the runway, which would then allow comfortable landings for the newly planned scheduled flights from Baku and other destinations.
Average rent in Karlovy Vary jumped by 14% over the past year – more than in any other large Czech city. One reason is several completed modern residential projects that appeal to wealthier applicants looking for a higher standard of living. Given the size of the spa town, even “a few” new developments can shake up the entire market, whereas in Prague or Brno the same number of new flats would simply “disappear” in the breadth of the overall offer.
If new air connections to Karlovy Vary do open up, it will be another noticeable boost for property prices and rent levels
If you are considering a promising investment location but Prague or Brno currently do not seem attractive to you for various reasons, Karlovy Vary may well be an appealing choice.
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