Czech Republic: Real Estate opportunities for italian and international investors

The real estate market in the Czech Republic has established itself in recent years as one of the most stable and profitable sectors for investors, both domestic and foreign. A recent study by Expats.cz found that more than 70% of Czech citizens consider real estate investment to be the best way to protect their capital in the long term. This orientation, supported by growing confidence in the sector’s strength, has increased demand for real estate throughout the country, focusing on Prague, Brno and other major cities.

One of the reasons for this trend is global economic uncertainty. The stock market, while promising at times, is often subject to high volatility, while cryptocurrencies, although having grown significantly in recent years, are perceived as an extremely risky option. Faced with these uncertainties, real estate investment, with its tangibility and ability to generate stable income through rents, is the safest and most profitable choice for many.

In the Czech Republic, this phenomenon is particularly marked. Low mortgage interest rates, combined with growing demand for housing in urban areas, have made property purchase an affordable choice for many families. Moreover, with the rising cost of living, Czechs see buying real estate as a way to protect themselves from inflation and currency depreciation. This conservative attitude towards investment, typical of the local population, has led to a steady increase in prices on the Czech residential real estate market over the last decade.

The Czech Republic is not only a fertile ground for local investors, but it is also attracting more and more interest from international buyers. According to Czech Society, a growing community of Italian investors has begun to consider the Czech real estate market as a viable alternative to more mature and expensive European markets such as those in Germany, France or the UK. The attractiveness of the Czech housing market for foreigners lies mainly in the still competitive prices compared to many cities in Western Europe and the economic stability of the country.

According to a report by CzechInvest, foreign investors accounted for around 30% of total real estate transactions in the Czech Republic in 2023, with a significant increase in Italian investments, which grew by 20% compared to the previous year.

In particular, the non-residential segment is experiencing rapid expansion. An article by Assocamerestero highlights how more and more Italian investors are exploring opportunities in the commercial real estate sector, attracted by the growing demand for office space, warehouses and logistics facilities. In the last five years, this sector has experienced significant growth, driven by the expansion of e-commerce and the urgent need for modern and advanced logistics infrastructures.

Prague and Brno are becoming strategic hubs for international companies, thanks to their central geographical location in Europe, making them ideal for distributing goods throughout the region. This rapidly expanding segment offers higher returns due to the stability of long-term leases and the growing presence of multinationals setting up their headquarters or operating centres in the Czech Republic. In the last five years, the Czech logistics real estate sector has grown by 35%, with Prague and Brno accounting for 60% of new developments. The demand for warehouses and logistics spaces has increased by 40%, to meet the needs of large e-commerce platforms such as Amazon and Zalando.

Despite the positive picture, the Czech real estate market also presents some challenges, especially with regard to the limited supply of new buildings. The pace of construction, especially in the residential sector, is not keeping up with growing demand, further contributing to rising prices. In addition, restrictive urban planning policies and the lengthy bureaucratic time-to-approval of new projects could slow down future development of the sector.

Sources: https://www.expats.cz/; https://www.societaceche.com/investimenti-immobiliari-in-repubblica-ceca/ ; https://www.assocamerestero.it/notizie/repubblica-ceca-crescono-gli-investimenti-immobili-non-residenziali ; https://csu.gov.cz/