We will hold a workshop in Prague organized by the Portuguese Chamber of Commerce in the Czech Republic and APEMIP. As active members of both organizations and considering the importance of sharing our motivations for participating in such events, I would like to include some notes in my article about the Czech Republic, its citizens, and its significance for our real estate market and our investment in the country.

The Czech Republic has emerged as a key player in Central Europe with a robust and growing economy. Over the past decade, the Czech economy has consistently demonstrated strong performance, with an average annual growth rate that surpasses many regional counterparts. With a population of approximately 10.7 million, the Czech Republic has a dynamic market that presents numerous opportunities for investors.

The Czech real estate market is currently experiencing a revival. Since last spring, there has been growth in the number of transactions across all types of real estate. Price declines have been moderate and smaller than anticipated. Foreigners are allowed to freely buy, rent, and sell real estate in the Czech Republic. Statistics confirm the liquidity of investments, with residential real estate prices increasing by an average of 3% each quarter. Five years ago, an apartment of 100 m² cost approximately €227,000; today, it sells for around €399,000, reflecting trends like those in the Portuguese market.

In terms of house price developments within the European Union, the Czech Republic is among the countries with the highest long-term growth dynamics, despite a slight decrease in prices last year. Over the last decade, house prices in the Czech Republic have surged by 125%, while the EU average has been 55%. Although property remains expensive relative to wages and interest rates are high, the proportion of housing loans with repayment difficulties remains historically low.

The real estate market in the Czech Republic is expected to reach a value of US$1.89 trillion in 2024, with the residential segment dominating, projected to account for US$1.51 trillion of this value. The market is anticipated to grow at an annual rate of 5.33% from 2024 to 2029, potentially reaching US$2.45 trillion by 2029. Globally, the United States is projected to generate the highest market value in real estate, amounting to US$132.0 trillion in 2024.

The Czech real estate market is experiencing a surge in demand for residential properties due to strong economic growth and a favorable investment climate. It is expected that the market will shift from being seen as problematic to being viewed as an opportunity for many investors and funds in 2024. This anticipated shift in sentiment could present substantial growth and profitability opportunities as the market rebounds.

Furthermore, commercial real estate owners should increasingly consider the impact of ESG (Environmental, Social, and Governance) factors on their assets, such as energy efficiency, carbon footprint, social impact, and ethical practices. Addressing these considerations proactively can align investments with responsible practices and enhance the long-term value and attractiveness of properties.

As I prepare to visit Prague, I am enthusiastic about exploring the opportunities and connections that this vibrant market offers. The Czech Republic, with its dynamic economy and evolving real estate sector, is a significant market for Portuguese real estate investors seeking to expand their reach in Central Europe. This workshop will be an excellent platform to exchange insights and build relationships that can benefit both markets.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes