Rents Fall In Brno as Demand From Students and Foreigners Wanes
In the last year, the number of foreigners moving to the Czech Republic has dropped significantly, and students have chosen to stay home rather than move to large cities. As a result, the demand for rental properties has fallen, and with it rental prices. While it may not seem like the time to invest in property, relocation experts Foreigners advise that the situation just requires careful calculations. Photo Credit: NS / BD.
Brno, Mar 5 (BD) – The anti-epidemic measures in the Czech Republic have halted social events, business plans are on hold, and cross-border movements are restricted. Prior to the coronavirus pandemic, demand for rental accommodation was growing year after year, especially in large cities such as Prague or Brno, but within months, this trend has reversed.
According to Foreigners, a company which helps expats relocate to the Czech Republic, the restrictions have influenced the decisions made by students and foreigners, who are major groups driving the domestic real estate market. This can be seen in the decline in demand for rental properties and the consequent drop in rental costs.
To fight the spread of coronavirus, stricter rules were set for entering the Czech Republic, which vary depending on the traveller’s country of origin. Over the past year, the number of foreigners coming to work or study in the city has dropped significantly. Many students, both foreign and Czech, have chosen to stay home rather than move to university towns, as tuition is taking place online.
In 2020, Foreigners recorded 30% fewer international clients at its Brno branch than in 2019. “While from March to December 2019 we had 1,318 foreign clients seeking housing, in the same period last year it was only 925, and they were the ones who already live in the country,” said Adam Lasota, Executive Director of Foreigners Brno.
The company reported a number of cases in which a foreigner is hired for a position in the Czech Republic and has prepared the necessary paperwork, but does not arrive due to restrictions. As fewer students and foreigners have come to live in larger cities, the demand for short term rent has dropped and owners of such properties have had to lower their prices. For certain types of real estate, rents are falling by CZK 1,000 – 2,000 per month according to Foreigners.
This trend in Brno was confirmed by representatives of the apartment letting agency UlovDomov.cz and followed statistics of published advertisements in the locality, which can be found here.
While this situation may discourage property investors, the company suggests that investing in real estate now may be beneficial in the long term, but that it is essential to make careful calculations before making any decisions. Co-founder of the Foreigners agency Vojtěch Stehno, responsible for the investment and development department, explains that ‘‘I wouldn’t be afraid to buy a property now, it’s still worth it. I just recommend having a higher reserve, then you will sleep with a calm mind.’’
The fall in rent may be a short term phenomenon as the number of foreigners working in the Czech Republic fluctuates. The Association of Business Service Leaders (ABSL), an association of leading centres in the Czech Republic which hire foreign staff, reported that only 7% of centres experienced either a negative impact on their activities in relation to the coronavirus pandemic. Further information can be found in the ABSL Report 2021.