Business HN: Citizens of former Soviet Union investing heavily in Prague flats
Citizens of the former Soviet Union, in particular Russians, are buying up significant numbers of flats in new apartment complexes in Prague, Hospodářské noviny reported on Wednesday.
After Slovaks, Russians are the biggest foreign investors in property in the Czech capital, the business daily said. What’s more, some developers are targeting their projects specifically at Russian speaking clients and banks are tailoring their services to meet their needs.
According to an analysis of home ownership in five Prague districts (Pragues 1, 2, 3, 5 and 7) popular with people from the former USSR quoted by Hospodářské noviny they own 2,200 apartments in those parts of the city.
Indeed around a quarter of the apartments in what the newspaper refers to as “developers projects” in Prague 3 are in the hands of people from the Russian Federation.
The Central Park Prague complex, which lies by the street Olšanská between the two parts of the Žižkov district, is striking in this regard. Some 300 of its 547 apartments are owned by citizens of the former Soviet Union.
In the central Prague 1 and Prague 2 districts, around a fifth of properties in new developments belong to such foreign investors, Hospodářské noviny says.
The Czech branch of Russia’s semi-state bank Sberbank offers tailor-made loans to buyers from the former USSR, providing mortgages since the start of July even to people who do not have legal residence in the Czech Republic.
A spokesperson for the bank, Hana Drápalová, said it expected the number of such mortgages to double by the end of this year.
In the mid-2000s, prior to the economic crisis, British people were among the biggest investors in property in the Czech capital. However, since 2008 they have in large part been replaced by buyers from the Russian Federation.
Milan Roček of real estate company Hyposervis says the Russian speakers have different reasons for investing in Prague from their UK predecessors.
The latter were primarily looking for healthy returns while the former are looking to put their money in a safe place. Some buy properties where their children can live while studying at university (third-level education is free in Czech, a Slavic language relatively easy for Russian speakers to master).
Interestingly, the Britská čtvrť (British Quarter) residential complex gradually being built in Stodulky in Prague 5 – the district with the highest total number of Russian-speaking flat owners – has only one resident from the United Kingdom. However, 18 percent of the properties (almost 300) in the estate are owned by citizens of the one-time USSR, Hospodářské noviny said.
Britská čtvrť’s website is in Czech, English and Russian, as are the sites of other such projects including the high-end Rezidence Korunní in Vinohrady and Sacre Couer in Smíchov.
However, the current situation regarding sanctions between the European Union and Russia may impact the trend.
Vjačeslav Kobus, the director of Praga Real Union, said some of his clients were adopting a wait and see approach. The last two or three months have been no great shakes, business-wise, he told Hospodářské noviny.