Prague has been described as ' The City of a Hundred Spires', 'Paris of the East', or 'The Golden City'. There is no doubt that it is one of the most beautiful and intimate cities in the world.  Prague has something for all tastes, whether simple or sophisticated. From taking a coffee on Wenceslas Square to walking through tiny cobbled streets or viewing some of the world's finest art, its serenity is captivating.

Prague, as a city, sells itself. It has never been a better time to invest in Prague Property. Its location in the centre of Europe makes it a city of strategic importance, with access to both western and eastern markets. The city of a hundred spires attracted nearly 7 million visitors last year. The transport infrastructure is excellent, combining an efficient underground, tram and bus system within the city, offering great value for money. The international airport, a mere 15-20 minutes by car from the centre, served just under 12 million passengers in 2007 and this is increasing annually.

The Czech residential property market has gone from strength to strength, particularly in Prague. This has been influenced by a number of factors, including; EU membership, a strengthening economy, an emerging middle class, lack of quality housing, low interest rates and the increasing availability of mortgages.

The +investment+property" rel="tag" onclick="javascript:urchinTracker('/outbound/www.technorati.com/tag/Prague_/st1_place_/st1_city_+investment+property');">Prague investment property residential market averaged gains of 12-13% during 2006, with some of the more sought-after areas achieving growth rates of up to 25%. The estimates for 2007 are likely to average about 10% growth for the year. The longer term predictions suggest potential ongoing growth of 6-7% per annum. Buy-to-let investors have increased demand for residential property in Prague and the rental market is becoming increasingly active and this has led to projects aimed at local and foreign buyers.

Property Ownership

EU and US nationals can own property here by applying for a residency card, or hold the property within a Czech limited company ( especially established for the purpose). Advice should be taken as to which method is preferable, however individuals who hold the buy-to -let property for more than 5 years are not subject to local taxes on the profit at point of sale. There is a sales tax of 3%, normally paid by the vendor.

Mortgage Finance

Non-Czech citizens have a range of mortgages to choose from, at rates competitive in comparison with the UK. Loans above 50% are subject to status and foreigners that meet the financial criteria are able to access mortgage finance of up to 85% to 100% of the purchase price. Increasingly, foreign buyers are looking to add Czech property  to their investment portfolios by making use of the generous loan to values. A good mortgage broker will be able to provide the required mortgage to suit the requirements of the proposed purchase.

Regulated Rents

Approximately a fifth of the housing stock is subject to regulation however, since the start of 2007, the law changed and the difference between regulated rents and private rents should be equal by 2011. This provides an expectation that this will increase the long term demand for better quality housing from tenants that want to become owner- occupiers.

One of the initial considerations for investment has to be the ability to capitalise or “cash-in” the investment at some point in the future. The strong local demand for property provides investors with the all important exit –strategy in the future. There is no need to cross one’s fingers and hope that another international buyer will appear when the investor wants to realise a profit. This  makes investment in Prague all the more attractive.

Demand

The Czech statistical office estimates that about 50,000 dwelling spaces need to be built annually for the next few years and so it is anticipated that demand will outstrip supply for some years to come.

Combined holiday and property viewing

Prague is the ideal location for the property investor that wants to combine a short break ( 1 hr 45 mins from most UK airports- with a number of budget airlines offering flights to Prague) and property viewings. The infrastructure offers easy access to most of Prague and the availability of local professionals for legal, rental, mortgage and property advice makes for an interesting and pleasurable property viewing experience.

To quote Franz Kafka-  Prague never lets you go… this dear little mother has sharp claws

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