<p>Experts: The yield from purchasing an apartment ranges from four to ten percent per year.</p>

Prague – The yield from purchasing an apartment ranges between four and ten percent annually. Apartments are therefore more suitable as a long-term and stable investment, generating additional income from regular rents. Investors today are acquiring both new apartments in developer projects, often still unfinished, and older apartments. Individuals or small groups of investors often buy apartments as an investment. Investment funds tend to focus more on the purchase of entire apartment buildings. This was stated by consulted experts to ČTK.

Developers also point out that in recent times there has been a growing interest in apartments from investors. Increased demand can, according to experts, create pressure and raise their prices in specific locations.

"For example, in the Ústí nad Labem Region, rental yield reaches six to eight percent, while in Prague it is rather two to four percent, but with a higher potential for value growth. In comparison to stocks, this usually represents slightly lower but more stable returns. Stocks and cryptocurrencies can offer higher returns, but with significantly greater volatility," says Jan Schwarzbach, regional director of a consulting company.

According to him, the growth or decline in property values is strongly dependent on mortgage interest rates and, consequently, on the rates set by the Czech National Bank. For a long-term investor, these are just temporary fluctuations, similar to other types of investment assets, Schwarzbach stated. "Given the still high demand for housing, I do not expect a significant correction in prices in the coming years," he added.

According to real estate agent Petr Bulan, key factors for investors are the yields from annual rents in relation to the purchase price of the property and the potential for price growth. A typical investor, according to him, owns several apartments. However, there are groups of people in the market who own dozens of properties and also investment funds that usually acquire entire rental buildings or negotiate directly with developers.

"Sometimes they are even treated as VIP clients, and the offer is sent to them before the official launch of sales. For the developer, it has the advantage of testing interest in the project and adjusting prices before the public sale begins," Bulan stated.

Demand for purchasing apartments has been steadily rising in recent times with the decline in mortgage rates. For example, in Prague, where significantly more new apartments are being built than in the regions, according to an analysis by development companies, the first quarter of this year saw the highest number of new apartments sold in 15 years – 2,550. According to developers, among other factors, the higher demand is driven by greater interest from investors.

In Prague, where apartments are the most expensive in the country, according to data from Deloitte, in the second quarter, the price of new apartments in development projects increased quarter-on-quarter by 1.9 percent to 169,300 CZK per square meter. In Brno, according to data from Trikaya, the price increased year-on-year by 13,500 CZK to nearly 140,000 CZK per square meter. The average price per square meter for older apartments in the Czech Republic, according to data from real estate platforms, was around 80,000 CZK, which is several percent higher quarter-on-quarter.