Sale of luxury apartments is increasing despite the crisis

Prague - The sale of luxury apartments in the Czech Republic is growing despite the economic crisis, with wealthy Czechs increasingly making purchases. Buyers view them as a safe investment, representatives from real estate agencies contacted by ČTK stated.
    The economic crisis has affected the luxury apartment segment in a manner similar to that of the luxury car market. In recent years, a record number of such properties have been sold in the Czech Republic. "The same applies to exceptional properties, which were overpriced before the crisis. Now they are at an interesting price, and affluent clients with available financial resources are acquiring them. With a good selection, it can be not only a safe way to store finances but also a good return on invested money," asserts the director of the real estate company, Petr Šmelhaus.
    Ilona Monferini Mančíková, the sales director of another real estate company specializing in luxury properties, shares a similar experience. "Luxury properties are an extraordinary commodity. According to our experience, this segment has essentially avoided the crisis," stated Monferini Mančíková, noting that the crisis has impacted socially vulnerable and middle-class individuals the most.
    The luxury real estate market has also benefited from problems faced by foreign banks. "The often-discussed crisis has not only not halted or slowed down the sale of luxury properties, but on the contrary, it has actually helped it. At a time when people cannot even be sure of the safe storage of their deposits in foreign banks, investing in luxury real estate becomes one of the few truly reliable options," remarked Mikuláš Ordnung.
    The crisis has increased the number of investment purchases of more expensive properties, confirms real estate agency director Peter Višňovský. "Properties in the luxury segment have been selling very well for a long time. If you can perceive any influence of the prolonged crisis, it manifests in a higher proportion of investment purchases. Clients who have spare financial resources do not want to leave it sitting in regular accounts, where its value is realistically declining due to very low interest rates," stated Višňovský.
    Chairman of the Board and CEO Milan Zavadil points out that luxury apartments sell much better than family houses. According to him, this is due to the lesser architectural diversity possible with apartments compared to houses. "The sale of luxury family apartments is more complicated because it is very difficult to meet the tastes of potential wealthy buyers. They usually tend to prefer purchasing land on which to build a house according to their own ideas," noted Zavadil. According to him, owners of family houses worth over 15 million crowns are likely to incur losses when selling.
    A notable trend in recent years is the increasing share of domestic buyers. This is confirmed by most real estate agents who have luxury apartments in their portfolios. "An interesting development is the growing interest of domestic buyers at the expense of, for example, Russian clientele. Although our clients usually pay in cash, I believe that the currently exceptionally favorable mortgage interest rates could widen the range of people for whom purchasing a smaller attractive property becomes more accessible," estimates Monferini Mančíková.
    Domestic buyers also predominate according to director Višňovský. "Foreign buyers play a very small role. Among them, Russians have been the most represented for several years," clarified Višňovský.
    Conversely, among the clients of another real estate agency interested in luxury housing, foreigners prevail. "Typical clients who purchase luxury properties are owners of foreign companies that operate in the Czech Republic and high-ranking managers. Foreign clientele constitutes about 65 percent of buyers, while the rest are Czechs," informed Zavadil, head of the real estate agency.