Frequently-asked questionWhat are some examples of properties currently available?
One customer says“We are extremely pleased Jacob found us exactly what we were looking for and things worked out with this flat.Facts and figures about Brno.
So you are a serious investor. True investors make decisions by numbers. What does Brno have to show for itself and what has it done over the last years?
The nitty gritty
One good thing about the economic crisis is that the fundamentals in Brno have improved in terms of yields possible to be achieved. As of this writing (May 2010), we have seen gross rental yields (a fundamental investment number and calculated by taking one year’s gross rent and dividing by the purchase price) increase to around 7%. Interestingly, the properties below were first picked in 2005. Since then prices have increased substantially and rents also but not as substantially.
| Property Description | 2008 Estimated Rental |
|
Studio apartment (1 + 1)
Seven minute walk to main town square. One minute walk to trams and biggest park in the downtown Brno area. Newly renovated apartment in a heritage building. Sold and link no longer active 2005 listed price: 750 000 CZK 2007 estimated price: 1 200 000 CZK 2008 estimated price: 1 400 000 CZK 2010 estimated price: 1 320 000 CZK |
8000 - 9000 CZK |
|
Two bedroom (3 + 1) flat on Merhautova St.
Completely reconstructed. One minute walk to the trams. Balcony. 90 m2. Big storage space in the basement. Sold and link no longer active 2005 listed price: 1 590 000 CZK 2007 estimated price: 2 750 000 CZK 2008 estimated price: 3 200 000 CZK 2010 estimated price: 2 975 000 CZK |
13000 - 15000 CZK |
|
Three bedroom (4 + 1) flat in heritage building
Eight minute walk to downtown square. One minute walk to the trams. Window view of the biggest park in the downtown area. Newly renovated. Balcony off the master bedroom. Around 140 m2. 2007 estimated price: 3 750 000 CZK 2008 estimated price: 4 400 000 CZK 2010 estimated price: 4 100 000 CZK |
16000 - 18000 CZK |
In looking through our files recently I came across a clipping from a June 2005 real estate magazine that really served to prove what the market has done in Brno over the last two years.
From one of the two large real estate magazines, Grand Reality, it is a clipping that listed the average CZK/m2 of the listed properties in the magazine for each district of Brno. They only actually did this for a few months and then stopped, probably from complaints of those whose prices were above the average. In fact, after we noticed they stopped running this feature, I personally went into their head office to see if we could still somehow get this information. However, they informed me that it was definitely no longer available. Too bad!
From this clipping it is possible to see that in June 2005, the average CZK/m2 for Brno across flats in all districts was around 21 000. This is the listed price although the actual sale price would not differ greatly.
The final word
Do we feel that current potential investors have missed the boat on Brno? The fundamentals are not as strong as they used to be but with the continued economic growth of the region we expect rents to be increasing.
The highest yields to currently be had are in very small studios which rent in the range of 7000 to 8000 CZK/month. Brno has a very large student population and a large number of foreign IT workers. These two groups combined make up the bulk of the rental market and these smaller apartments are always in demand by them.
Other sectors such as the house resale market has not seen the property price jumps which has hit apartment prices. As wealth grows, we expect this market to also experience a stronger than average period of capital growth