The interest in purchasing real estate abroad is on the rise, with more and more people considering buying a flat, house, or apartment in a foreign country. There are several reasons why this trend is growing, and there is a wide range of destinations that investors are turning their attention to. However, one country stands out among them – Spain. The price of a sea-view apartment in popular resorts on the Sunny Coast or the island of Tenerife will not be higher than a similarly sized property in the vicinity of Prague. Not to mention the capital city. „When you have money for a property in Prague or the Krkonoše Mountains, you have money for a property abroad,“ says Jan Rejcha, the owner of Rellox agency, the largest real estate seller in foreign countries.
Why are Czechs buying properties abroad? When did the interest in investments in Croatia, Spain, or Italy start to grow? What about their profitability? Do celebrities play a role in this trend? And how is life in Spain, which is the most sought-after destination among Czechs? These questions were discussed in the Money Maker podcast by Jan Rejcha from Rellox and Jitka Loucká, the executive director of the Hispanic-Czech Chamber of Commerce.
### The Growing Interest in Foreign Real Estate
Jan Rejcha: „The interest in foreign real estate has been boosted by Covid, and it has been holding steady ever since. Over the last three to four years, it has been stable. There are locations that have seen a significant increase due to Covid, such as Spain, including the Canary Islands, and partially Dubai. Thanks to the media, it has become more mainstream. This means that people who want to buy a property for investment or for themselves are no longer just considering Prague or the Krkonoše Mountains but are also looking at foreign countries. It has also reached people who are not in the top income categories. So even those who have only three million are starting to look abroad.“
Jitka Loucká: „We see this every day at the Chamber of Commerce. People are reaching out to us who need related services. This includes tax advisors who help with tax returns, as well as lawyers and all services related to it. Even services related to property management, because you are usually not there all the time… We see a significant increase not only after Covid but also due to the conflict in Ukraine. There is a certain fear of what might happen, and that’s why the further away, the better. The Canary Islands are a six-hour flight from here, there is a direct flight connection, so they are a relatively interesting location to buy a property.“
### Why People Prefer Buying Properties Near the Beach
Jitka Loucká: „Often, prices in Prague are comparable to prices in very attractive regions around beaches abroad. However, I personally think that cities in Spain that are inland but have a relatively high quality of life, good purchasing power, and where you can buy an apartment for 200,000 euros, are also interesting. That’s not such a high amount. (…) This can also be an interesting investment opportunity. So, it’s not just about looking at beaches because they have become quite crowded lately.“
Jan Rejcha: „I agree that going a bit inland is not a bad idea. But practically, from what we sell by the sea, 70 percent of people buy within walking distance to the sea, meaning within 500 meters. This also means that they buy at essentially the highest prices. The further you go from the sea, the prices usually go down. Of course, there are exceptions in exclusive locations and closed communities, but the sea is crucial for the vast majority of people.“
### The Purpose of Buying Real Estate
Jan Rejcha: „Most people buy primarily for their own use, and this reason lasts for three to four years until they really enjoy the property. Then maybe there comes a moment when they start renting it out because they don’t go there as often, they have discovered the location and started traveling elsewhere. But the primary reason is really subjective, meaning personal use. Renting out is more of an added bonus to the property. Of course, there are clients who have renting out as the primary reason, those are classic investors who don’t really care whether it’s Spain, Italy, or Austria. But they are more of a minority… But if you have money for a property in Prague or in Špindlerův Mlýn, then you have money for a property abroad.“
### The Profitability of Recreational Properties
Jan Rejcha: „Yields in Europe are quite similar, so in the mountains in Austria or northern Italy, you usually range from 4.5 to a maximum of about 6 percent. When we go into detail, it depends on the investment it relates to: whether it’s just the property or whether it’s the total initial investment because you pay taxes, fees, and so on. And by the sea, it depends on the area. Essentially, it depends on having the longest season there, so the further south you go, the longer the season will be. Or you find an area that works dually, but those are usually mountains. Some areas in Austria are starting to be interesting in this regard.“
### The Influence of Celebrities on the Interest in Foreign Real Estate
Jan Rejcha: „Regarding the Canary Islands or Spain in general… It is interesting that even in this real estate rank, the celebrity factor works. It applies to the Canary Islands or the Costa del Sol. For people who want to buy a property for millions or even tens of millions, it is interesting. They want to live near famous people, such as singers, actors, actresses, for some reason. They come here because they may have seen something on Instagram.“
### Life in Spain
Jitka Loucká: „Czechs always tell me how children are running around the squares in Spain at midnight. And I say, imagine that during the day, it’s impossible to function outside, so you just retreat inside, rest, and come out after 6 o’clock and then start functioning. You go to the beach, dinner is at 11, and then until two or three in the morning. The kids are fine, they are more flexible than we think. It’s about overcoming certain stereotypes. When I first came to Spain with my four-month-old son, and my husband told me we were going for a drink and to take the little one with me, I objected that I wouldn’t go to a bar with a stroller. In the end, I went, and I barely fit in there because there were four other strollers. This is how life is in Spain, and it teaches me to break my internal settings from the Czech Republic and to do things flexibly and adapt to the locals.“
In conclusion, the growing interest in purchasing real estate abroad, particularly in Spain, is driven by various factors such as affordability, lifestyle preferences, and investment opportunities. Whether for personal use or rental income, foreign properties offer a unique experience and potential for financial growth. With the influence of celebrities and the allure of coastal living, more people are exploring the idea of owning a piece of paradise in a foreign land. Life in Spain offers a different pace and perspective, challenging stereotypes and embracing a more relaxed and flexible way of living. As the trend continues to rise, the allure of foreign real estate investments remains strong for many Czechs seeking new horizons and opportunities.