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July 20th, 2008
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Looking for cheaper housing options

Residents head outside the city's expensive center for a place to call home these days

By Curtis M. Wong
Staff Writer, The Prague Post
February 20th, 2008 issue

COURTESY PHOTO
Development companies like ECM and Orco Group have a number of housing projects going up in the outlying Prague suburbs.
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After years of clamoring for exclusive apartments in Prague, many residents and their families are heading for state-of-the-art suburban developments outside the city center with plenty to offer.
While this is hardly a new trend, the past five years have seen a boost in the appeal of the city’s outlying neighborhoods. The migration has not gone unnoticed by Prague-based real estate firms, which are investing millions of crowns in new developments that aim to please residents who are used to city conveniences such as public transit and proximity to retail outlets and entertainment centers.
According to many developers, affordability may be the most obvious factor, but it’s the increasing quality of so-called “fringe developments” that is attracting new buyers to the suburbs.
“I think the main reason for the trend is the fact that new residential projects on the fringe parts of the city reflect quality construction, superior fit-outs and convenient transport options, and are much more affordable than developments in the center of town,” says Jason Cahill, deputy European sales director for Orco Property Group. “It’s happening now due to the maturity of the residential market, which has been developing for the past 17 years. It’s an inevitable progression.”
Developers say that the trend’s demographic appears to be focused on three distinct groups — first-time buyers who are often single, newcomers from regional cities and new families for whom more space, larger yards and quieter surroundings is really attractive. In addition, there has been a noticeable increase in the number of young expatriate buyers, many of whom are bound by long-term contracts and more interested in purchasing property than in previous years.
“The group of residents who are interested in moving out of the city center is very large, and their motivations are often very different,” says Tomáš Vlček, vice president for sales and marketing at ECM. The company is seeing an increased demand “for high-quality individual development projects, and that demand seems to be growing.”
Adds Cahill: “All different types of people are looking for housing outside of the center of Prague, depending on their idea of comfort and style. The key players are already in the game, and the larger developers will have an advantage due to better cost measures and overall know-how in the marketplace.”
In keeping with the suburban shift, many Prague-based real estate developers have shifted their focus to many new projects. Recently completed or in-development at Orco are the Slunečný vršek and Štěrboholy apartment projects located in Prague 10 and the Nad Beránkem apartment project and the Cukrovarnická Luxury Villas in Prague 6.   
While many developments are taking place out of the center but still within the city limits, the trend seems to be moving even further afield. On the boards for ECM is the 42,000-square-meter (452,084-square-foot) Unhošť Terrace development, which the company hopes to have completed by the end of the year. Located 17 kilometers outside of Prague in Křivoklátsko, the Unhošť Terrace project will provide 104 high-quality lake-front homes for families.  
As the city continues to attract more foreign residents as well as locals from regional cities, real estate developers are anticipating substantial property growth in the suburban regions in the next decade or so and, with that increase, a natural demand for higher quality and services in all areas.
“In my opinion, there will be a noticeable shift in quality in terms of both the housing itself and the locality,” Vlček says. “The differences between the really attractive localities and those that are less attractive are going to widen, and civic amenities and the transport links of the locality will play a more crucial role. Requirements for transport infrastructure are going to become much higher.”
Interestingly, Prague-based firms expect the fringe development trend, in the end, to have the converse effect. Developers say that the suburban demand may actually end up attracting new property investors back to the city over time. In fact, they confirm, many Prague residents who left for the suburbs nearly a decade ago are now in the market to buy a centrally located flat, in the interest of decreasing their daily office commute and returning to city life once again.
“We have seen many cases of people who moved out of Prague in the 1990s who are now looking to move back and buy property,” Vlček says. It would seem these types of developments “are far from being [an established] trend.”  
Adds Cahill: “As a developer, we’re anticipating significant growth in the market for both central and suburban residential projects. Along with that growth, [there will be a demand] for even better [housing] and more luxurious conveniences.”

Curtis M. Wong can be reached at specialsection@praguepost.com


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