With floods forgotten riverside property becomes a hit

Hana Vorlíčková
16. 9. 2008 8:10
Demand for properties in flood risk areas rising
Floods in the Rychnov region in 1998
Floods in the Rychnov region in 1998 | Foto: Hasiči Královéhradecký kraj

Prague - Czechs have forgotten about the extensive flooding that hit the country repeatedly in recent years, which is suggested by the rising demand for properties in flood risk areas.

The rise in demand has been unprecedented in the past two years. Prices of land in some waterfront localities have even slightly surpassed the prices of nearby building plots.

"Prices in attractive localities right next to water are often higher than outside the flood risk zones because of rising demand and a limited number of interesting houses," says Zdeněk Materna from Mexx Reality.

Property experts estimate that in such cases, prices can climb 10-20% above the standard price of properties with no direct proximity to the river. In other localities, with no direct view of or access to the river but still with the risk of flooding, prices stay below the market average, said Materna.

"Prices in less attractive localities still remain roughly 20% below no-flood-risk areas," he added.

Anti-flood barriers lure speculators

The situation changes the instant a town announces it would come up with anti-flood measures. That can cause a revolution on the local property market, and investors are coming to the locality en mass even before the measures are put in place. The reason? Simply the fact that property prices will rise by up to one-third.

Prague 8 district mayor Josef Nosek confirms that investors are increasingly interested in flood risk areas - which, however, enjoy a greater deal of protection now. His district, which comprises such areas as Karlín and Holešovice, Prague's worst-hit localities during the 2002 floods, has recently seen the start of construction work on one of the largest development projects in Prague - the reconstruction of Rohanský ostrov.

The Brno and Králův Dvůr town halls, for example, have also registered an increased interest from developers. In these two municipalities, decisions on some anti-flood measures have been taken only recently.

Anti-flood measures have an enormous impact on a territory's development. Once the barriers were put up in Prague 8, there is almost no place in the district with a ban on construction declared in connection with the risk of floods.

But speculators also seek properties which are now under construction bans at the moment due to possible flooding. These include, for instance, the Jarov area in Dolní Břežany, Temešvár in Hradec Králové, Krnov in Havířov, and the Hrušov and Koblov areas in Ostrava, said Ondřej Soukup from Mexx Reality. One of such areas in the capital city is Lipence in Prague 5.

Floods mean good business abroad

Flood risk areas attract speculators abroad as well. The floods that hit Düsseldorf and Frankfurt am Main in the early 1990s first slashed prices of local properties by a fifth.

The installation of anti-flood barriers then sent prices up again. Fuelled by huge demand, the price increase reached as much as one-quarter to one-third, and prices surged significantly above the neighbouring markets.

One example of rising interest in areas hit by floods in the past is London's Docklands. When the construction of anti-flood barriers started there more than twenty years ago, investors flooded the former industrial area virtually overnight. The English then built several embankments to protect London against a tidal wave coming to the city up the River Thames.

Adapted and republished by Prague Daily Monitor.

 

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