Sim Property Newsletter March 2010 - Prague supply & Bulgaria services

We kick this month off with a look at the supply of property on the market in Prague and mention some of our new services in Bulgaria.

Prague market data

The graph below indicates the trend of how supply of property for sale and rent has changed over the last year in Prague.



It's clear to see that the supply of rental property in Prague has increased dramatically (around 40% in one year) and had even been increasing before this due to the large number of developments that have completed in the last 18 months.

The mid to higher end of the market has particularly been affected and yields have dropped substantially.

Sales supply has been relatively stable and has even decreased slightly. This has not stopped prices falling by around 30% over the last year and a half. Now the market is a position where short term increases or decreases in price is unlikely.

Whilst today it's possible to buy property in Prague at relatively good prices it's still hard to get the yields (luckily mortgages are still available and rates low). Furthermore, with the Czech Crown below 30 to the GBP it means investing in Prague today is not the no-brainer it used to be.

That said there are some good deals around but you have to know where to look for them, however, until the supply situation rectifies I would hold tight and only buy very selected deals.


Bust

Recently when I've walked around the area where our office in Prague is located I've noticed a number of shops have become empty. This includes a health food shop, a bike shop, a re/max real estate agency and others. A sure sign that the difficult economic condition are still here and starting to bite.

It's also rumoured that various well known real estate agencies and property management companies in Prague are also having trading difficulties. Furthermore, Czech developers continue to sell off assets and reorganize. Times are tough. However, things are not as bad as say in Bulgaria or Romania where many real estate companies have had to close down completely and the landscape is dotted with monuments of unfinished developments.

For the rest of this year at least I see conditions in the real estate markets of Central and Eastern Europe continuing to be challenging.


Bulgaria - new services

We've recently expanded our range of services in Bulgaria. Previously we had focused solely on the Sofia market. However, we've since had so many enquires about property services in Bansko and Sunny Beach that we've since decided to offer a range of property management / lettings / resale services in these locations also.

If anyone has properties in locations such as Bansko and Sunny Beach and needs assistance just get in touch.


After a long winter the sun has finally arrived in Europe, let's hope this helps to defrost property markets across the continent.


Regards,
Simon Tweddle.
www.simpropertygroup.com