Looking back on 2020 will forever be associated with a coronavirus pandemic. How did it affect the exclusive real estate market? Not significantly. The supply-demand ratio is balanced in the case of the luxury segment, this situation is stable and persists despite the epidemic. On the other hand, from the investor's point of view, ordinary real estate is often not about specific houses or villas, but rather about a commodity, so it is easier to create an overpressure of demand oversupply. This is confirmed by the real estate agency Luxent – Exclusive Properties, specializing in the sale and purchase of the luxury real estate, which traded many premium properties last year.
„There is naturally less overall supply for luxury real estate and there are also fewer relevant buyers. However, they are absolutely clear in their requirements and have high demands. The probability that their interest will meet with the specific real estate offered under the given business conditions is therefore relatively low. One of the consequences is, for example, a longer sale time,“ explains Jiří Kučera, director of the Luxent – Exclusive Properties real estate agency, adding: „This has not changed in the last year either. The crisis as such has not yet manifested itself and it is only possible to speculate whether and when and to what extent it will also affect the luxury segment. However, we assume that if there are any changes in the premium real estate market, it will not be a fundamental change.“
Last year, interest in rentals grew considerably, as people often could not afford to buy an apartment in Prague due to the high prices of ordinary real estate. According to Jiří Kučera, a similar development can be expected in the coming months: “We have to wait for the situation at the end of spring to the beginning of summer when a substantial part of the concluded short-term annual leases ends. It depends on the expectations of the owners or tenants who sublet the apartment, regarding the return of tourists. Also, if they are burdened by credit, in the event of a negative outlook, it can be assumed that they will have to get rid of real estate or leases.” However, the crisis may affect the middle class. If the owners of luxury apartments or houses decide to sell them, it is usually based on long-term consideration and plan, as they are not so sensitive to changes in the economic situation.
The exclusive real estate segment is hardly affected by the development of the mortgage market, as a mortgage is not usually a condition for purchase. The decline in interest rates, which continues at the beginning of this year and which has a significant impact on the high demand for ordinary real estate, is not very pronounced for the luxury ones.
On the contrary, what is the same for both segments is that, under the influence of a pandemic and limited travel, interest in houses with a garden or recreational real estate is increasing. People now want housing that allows them to work and study for children in the home office mode, comfortable space for long-term spending of the whole family, and the possibility of staying in nature, whether in their garden or nearby. The demand for such real estate is therefore very significant and will not just disappear. Also, people who often went to more expensive exotic foreign destinations on holiday and now cannot, are increasingly buying their own luxury holiday homes in the Czech Republic with the comfort they are used to during their holidays abroad. At the same time, there is a growing interest in streamlining investments in recreational real estate by renting them at a time when the investor does not need them for himself.
There has been a long-term interest in investing in real estate, both in absolute and relative terms concerning purchases for own use. For investors, real estate is usually the first choice (about long-term good experience, appreciation, security, etc.), and so in terms of diversifying the risk of the investment portfolio, they play an irreplaceable role. Of course, the most in-demand are ordinary apartments available 2+kt with excellent transport accessibility (for example, near a metro station). But investment in luxury real estate is also growing. Hand in hand with this interest, the offer of investment instruments is also expanding, for example in the form of real estate funds. The real estate agency Luxent is also preparing to launch the fund soon to enable those interested to invest in high-quality premium real estate.
Naturally, Prague and its immediate surroundings generate the largest movement in the exclusive real estate market, partly due to their relatively larger share compared to the rest of the country and partly due to the concentration of qualified buyers. On the contrary, the demand for luxury second-hand housing is, of course, situated outside the metropolis in attractive recreational areas. The interest in houses outside Prague is also proved by the sales of the company from Luxent in recent months. "Before Christmas, we launched the sale of Residence Nad Černými lesy in the district of Prague-East, and at the end of January, we had 60% of the capacity reserved or sold. Before that, we sold out 90% of family semi-detached houses in the Klecany Houses project near the main one in half a year the city, which we consider to be absolutely above standard. We are also registering huge interest in MOLO Lipno Resort, one of the most exclusive recreational housing projects on the Czech market. Part of our current offer also includes historic real estate, which is exceptional – we have just sold the Jistebnice chateau and the Prčice estate (in the reservation), "says the owner of the Luxent real estate agency – Exclusive Properties Emil Kasarda.
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