Prague - Foreigners seem to be increasingly interested in buying property in the Czech Republic. Bank officials and real estate agents are speaking about a new trend.
One of the obvious reasons behind this is the growing number of foreigners in the country. At the beginning of 2007, there have been less than 330 thousand of foreigners with permanent or long-term residence permit. Within the same year, the number had grown to 388 thousand, according to the Czech immigration authorities.
Real estate agents say that some foreigners - even those not residing permanently in the country - buy more houses and appartments in order to rent them.
Russians and Asians pay in cash
Mortgaging is quite common, especially among Western Europeans, Slovaks and Americans. On the other hand, Russians, Chinese and Vietnamese very often pay in cash, explained a real estate agent.
From all the foreigners, the ones most interested in buying Czech real estate are Slovaks, a significant minority of at least 60 thousand long-term and/or permanent residents. They prefer to buy property in Prague, Ostrava, Brno, Olomouc and Zlín.
US citizens, Germans, Britons, Israelis and French are also interested largely in purchasing real estate in Prague but some of them have bought flats in other major cities such as Brno or Ostrava.
For Russians, the most popular place aside from Prague is (no prizes for guessing) Karlovy Vary. According to Kateřina Jírgesová from the immigration police, there are now 15 thousand Russian citizens with long-term or permanent residence permit in these two cities - 13 thousand of them in the capital, the rest in the popular spa town in Western Bohemia.
Every tenth mortgage to a foreigner
From the total number of loans granted by local banks to physical entities in 2006, 3-5 per cent were attributed to foreigners. In 2007, the proportion grew to 5-10 percent.
For example, Česká spořitelna - the major Czech savings bank - granted nearly 10 per cent of their mortgages to foreigners (imcluding the nearly native Slovaks) in 2007. As for the other banks in the country, the proportion is slightly lower - from 5 to 7 per cent. Real estate agencies tend to confirm the trend.
As they typically show interest in more luxurious property, foreigners also tend to use higher mortgages than Czechs, whose average mortgage is roughly 66 thousand euro (1,7 million CZK).
Hence, foreigners have already spent billions of Czech crowns for real estate in the Czech Republic.