Svoboda & Williams discusses real estate trends

Managing partner Prokop Svoboda says the market is moving forward

The real estate market has undergone a substantial recovery, but there are changes and trends people should be aware of, including a move toward greener buildings and new rules governing mortgages.

In the past 10 years, the real estate market has become much more professional and standardized. “The key to success nowadays lies in details rather than in basic concepts,”Svoboda & Williams managing partner Prokop Svoboda told Prague.TV. “At the same time, it’s much bigger business now.”

The financial crisis of 2008 is considered the worst financial crisis since the Great Depression of the 1930s. But signs of improvement are evident. “While the market is now in a better, healthier state than it was in before 2008 and the overall mood is optimistic, one cannot, on the other hand, help but notice signs of overheating, especially in the residential segment,” Svoboda said.

Industrial real estate and logistics sectors are now the strongest. This is mainly due to the strategic location of the Czech Republic within the CEE region and the strong bond between the Czech and the German economies, according to Svoboda.

A recent development is the introduction of the green certifications LEED (Leadership in Energy and Environmental Design) and BREEAM (Building Research Establishment Environmental Assessment Method). These certifications are intended to ensure buildings are constructed with attention to energy saving, water efficiency, reduction of CO2 emissions and the responsible use of resources.

“The LEED, BREEAM and similar certifications are becoming a new standard in commercial real estate. The certified buildings are easier to sell and offer a more sustainable yield,” Svoboda said. “Moreover, some companies will only consider leasing space in a building if it has one of these certifications.”

While certification is more known for office and industrial buildings, it is catching on for private homes and apartment complexes too.

“The 'green' aspect of properties in general is a big topic in residential real estate and buyers' demands are growing. We, of course, try to meet these requirements,” he said. “Currently we offer, for example, the U Pernikářky 7 residential project, which features premium apartments in a passive building located in the Hřebenka (Prague 5) villa neighborhood,” he said.

Svoboda & Williams says there are other current trends the public should be aware of. “Many of our residential clients have been looking for city apartments and houses surrounded by greenery, or at least featuring a little garden or backyard where they can plant vegetables or relax. Some developers have offered these kinds of properties,” he said.

“The Barrandov Garden residential project comes to my mind here. There the developer has been working with a garden architect, aiming to create a sophisticated, varied garden with common areas, a pergola, a fire ring and a children's playground as well as private 'green rooms' which will belong to the individual apartment owners,” he added.

Svoboda & Williams also pointed out recent legal changes that people should now be aware of. “Perhaps most importantly, the rules on mortgage lending have tightened and will get even stricter. Due to the regulations of the Czech National Bank, banks have not been able to provide 100 percent mortgages. Since October 2016 the limit has been 95 percent of the property value and as of April 2017 the limit will be 90 percent of the property value,” Svoboda said.

“Moreover, the new recommended limit on mortgage loans with 80 to 90 percent LTV (loan-to-value) will be 15 percent of all mortgage loans provided by the given bank. So buyers will need to have a substantial down payment,” he added.

“Another important change has been, as of Nov. 1 2016, that the payer of the property acquisition tax will always be the buyer, while in the past it was usually the selling party. This means that if you are buying a property, you will be taxed 4 percent of the sales price,” he said.

The company itself has undergone changes recently. Cyril Dejanovski has become the new business director of Svoboda & Williams. “He has an excellent track record, especially given how young he is, and we managed to agree on a vision for the future development of the company,” Svoboda said, adding that he was an experienced real estate professional.

The company had an “exciting and successful” year in 2016. “We have many new members on our team, we launched a new website with responsive design as well as the Svoboda & Williams mobile app,” Svoboda said. “We were honored to have been awarded the CIJ Award for the Best Local Power Broker Team of the Year.”

Svoboda & Williams has been providing real estate and relocation services in Prague as well as other regions of the Czech Republic since 1994. The company has a Prague office at Na Perštýně Street in Old Town and a Brno branch on Biskupská Street. For more information the company website is www.svoboda-williams.com.

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