The Czech real estate market is a unique landscape that presents both challenges and opportunities for investors and developers. In comparison to foreign markets, the Czech market is relatively small, both in terms of absolute size and population. Petr Palička from Penta Real Estate notes that there is limited construction and transaction activity, with public-funded projects being rare occurrences. Exceptional developments, on an international scale, are also few and far between in the Czech Republic.
Fraser Watson from Savills echoes this sentiment, highlighting the dominance of domestic investors in the Czech market, particularly in 2023. This trend sets the Czech market apart from many other European markets, where foreign investors may play a more significant role.
When it comes to trends and preferences in the real estate market, Petr Palička believes that there are not significant differences between the Czech Republic and other countries. However, Fraser Watson points out that there is less conversion of older buildings into residential properties in the Czech Republic compared to many other European cities.
In terms of supporting the development of the real estate sector in the Czech Republic, both experts emphasize the importance of streamlining and clarifying legislation, particularly the construction law. They also stress the need for efficient enforcement of rights and the digitalization of government services, including the construction permitting process.
Looking ahead, both Petr Palička and Fraser Watson consider expanding their businesses into foreign markets. They emphasize the importance of transparent legislation, functioning government administration, enforceable rights, and a stable economy in potential target countries. For Petr Palička, a favorable market size and a balanced relationship between buyers/sellers and tenants/landlords are also crucial factors in determining investment opportunities.
While there is no one-size-fits-all „investment paradise,“ Fraser Watson suggests that the United Kingdom may be ahead of other EU countries in terms of market repricing, debt costs, liquidity, and overall investment attractiveness. The UK’s ability to adapt quickly to market changes and its stable legal framework make it an attractive destination for investors.
In conclusion, the Czech real estate market may be smaller and less dynamic compared to some foreign markets, but it offers its own set of advantages and challenges. By addressing regulatory hurdles, fostering a business-friendly environment, and exploring opportunities in foreign markets, investors and developers can navigate the complexities of the Czech real estate landscape and capitalize on emerging trends and opportunities.