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House Hunting in … the Czech Republic | ASHARQ AL-AWSAT English Archive 2005 -2017
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A night view of the Czech capital Prague. (Reuters)

Prague – A 19th-century farmstead with six bedrooms and five bathrooms renovated with an eye to historic detail is for sale in Racice, a small town near Prague in the Czech Republic.

The 2,583-square-foot farmhouse has two stories. It sits on a lot of almost an acre, along with an early 20th-century barn used as an atelier; a building for drying hops from 1926; and a stone rotunda used as a bedroom. The farmstead was renovated between 1989 and 1993 by the current owner, Dagmar Brezinova.

The furniture, much of it antiques, is included in the asking price. The first floor has an office and a bedroom overlooking the village green. Nearby is a kitchen, two bathrooms and a utility room with a new bio-fuel stove. Beyond is a dining room for 12 people and a second kitchen, a stone fireplace and doors opening to the garden. Walls, mostly painted white, are stone and brick; the floors, windows and the staircase, generally pine. The kitchens have wooden countertops, glass-fronted storage cabinets and basic appliances.

A portion of the second floor is taken up by an apartment with two bedrooms and a bathroom. The apartment faces the green and is furnished with a Biedermeier-period sofa and armchairs. The rest of the second floor contains two bedrooms, one with an outdoor staircase to the garden, and two bathrooms. The ceilings of one bedroom and a bathroom are made with traditional rounded beams.

The old hops building has a porch for alfresco dining with a large fireplace and a bar. The property is landscaped with mature nut and cherry trees, along with a pond with waterfowl.

Racice, a village of about 300 people, has taverns, shops, restaurants and supermarkets within a 10-minute drive. There are many castles in the region, along with trails for cycling, tennis courts, fishing, horseback riding and a small airport, Brezinova said. Racice is 50 minutes by car from Prague’s center and an hour from an international airport. It is also an important center for rowing and flat-water canoeing.

“We’ve celebrated the victories of many Czech Olympic sportsmen, canoeists, rowers and others” at the farmstead, Brezinova said.

Market Overview

The housing market in Prague is robust, with well-priced homes in good locations often selling in a matter of weeks, often with multiple bidders, said Tomas Blahuta, a senior property consultant at Svoboda & Williams, which has the listing for this house.

“Due to the limited supply and the lack of new developments in Prague for bureaucratic reasons, prices have been growing in almost every location, sometimes a double-digit increase year-on-year,” Blahuta said.

The market is driven by a low unemployment rate, wage growth, low interest rates and the availability of mortgages that, until recently, financed up to 100 percent of a home purchase, said Blanka Vackova, the head of research at JLL Czech Republic, a real estate agency.

“For foreign buyers, the Czech Republic and Prague represent a safe and stable political and economic environment with a high standard of living,” she said.

Demand for homes may slow this year because of imposition of stricter rules for obtaining mortgages, along with a change that shifts the 4 percent property transfer tax from the seller to the buyer, Vackova said.

Still, constraints on new development may limit supply and help keep prices high, said Peter Visnovsky, the director of the real estate agency Lexxus.

“When we talk about the mid-range market, you can buy a newly built one-bedroom apartment for $200,000, and a two-bedroom apartment for $260,000, including parking place and taxes,” Visnovsky said.

The average price of a home in Prague is about 65,000 to 75,000 koruna per square meter, or about $266 to $307 per square foot, Blahuta said. “But we’re seeing a real push on prices lately with new homes and apartments trading above 100,000 koruna per square meter,” or about $409 per square foot, he said.

Who Buys in Prague

Foreign home buyers typically account for about 15 percent of the sales over all, and are more numerous at the upper end of the market, Visnovsky said.

They tend to look for homes in and near the historic center, brokers said, including areas like Old Town, Lesser Town, the Castle District and Vinohrady.

The majority of foreign buyers come from Russia, Ukraine, European Union countries, Britain and the United States, brokers said. Smaller groups include Vietnamese and Chinese people who are running businesses in the country, said Lucie Mekhail, a senior consultant with JLL Czech Republic.

Buying Basics

The Czech Republic is a member of the European Union, though it still uses the koruna. Since 2011, there have been no restrictions on foreign home-ownership.

“However, since the administration process is quite extensive and done fully in Czech, we recommend to have a local agent deal with the acquisition process,” Blahuta said.

Many home buyers hire a lawyer, and fees for legal advice start at 2,000 koruna an hour, or $88, reaching 5,000 koruna, or $220, an hour — higher for an international law firm, Blahuta said.

Closing costs include a 4 percent transfer tax paid by the buyer. Mortgages are available from Czech banks, which may finance up to 80 or 85 percent of the purchase for foreign buyers, brokers said.

Languages and Currency

Czech; koruna (1 koruna = $0.044)

Taxes and Fees

The annual property taxes on this house are 3,000 koruna, or about $132.

The New York Times