Crises Push Czech Property Investors Abroad

Real estate remains the most attractive investment for Czech households, but high domestic housing prices are encouraging some buyers to consider overseas property. Resort developers link sudden sales increases to elections, government crises and military conflicts. These episodes demonstrate investors’ sensitivity to political risk, but they do not yet prove a large-scale movement of European capital into exotic property markets.

Property remains the preferred Czech investment

The CzechRealtor material provided for this article says that 79% of respondents in a recent savings and investment barometer considered ownership of a house or apartment the most attractive investment. Property ranked ahead of bank deposits, precious metals and other instruments available to individual investors.

The result does not represent a sharp change in household preferences. An IBRS survey for Golden Gate published in October 2024 produced a similar finding, with 80% of respondents selecting property as their preferred investment. Housing retains the reputation of a tangible asset that can be occupied, rented or transferred to heirs.

Strong interest does not mean that housing is affordable. Some households may regard property as the best investment while lacking enough capital to buy an additional apartment in Prague or another major city. Potential investors are therefore comparing the Czech market with Spain, Turkey, Indonesia, Thailand, Costa Rica and other destinations where the initial price may be lower.

High prices alter the geography of investment

The average completed apartment price in the Czech Republic reached CZK 63,521 per square metre in 2024. Prague averaged CZK 115,889. Family houses sold for CZK 51,867 per square metre nationwide and CZK 106,753 in the capital. Apartment prices increased by 6% during the year, while family houses rose by 1%.

These averages cover homes of different ages, conditions and locations. New apartments and high-quality properties in central Prague can be considerably more expensive. Purchasing even a small capital-city asset may require several million koruna before renovation, tax, maintenance and financing costs.

The Czech National Bank reported that real apartment prices surged during 2024 and early 2025, moving above their 2022 peaks. Prices grew faster than household incomes and market rents, reducing affordability and moving visibly above long-term trends.

This high domestic entry cost allows overseas developers to use striking comparisons. Petr Hemerka, head of Indonesian resort developer Arya Properties, argues that the price of a garage in Prague may in some cases purchase a villa in a tropical destination.

The comparison combines assets with different economic and legal characteristics. A Prague garage operates in a mature local market with cadastral registration and established resale demand. An Indonesian villa may be offered through a time-limited use right, a land lease and a compulsory management agreement with a particular operator.

Political crises produce sudden sales increases

Arya Properties links some of its transactions to the so-called black-swan phenomenon. The company says that a major political disturbance in a Western country can activate a group of investors seeking to move part of their wealth into a more distant jurisdiction.

One cited example involved the Netherlands. The developer says Dutch clients purchased more than 80 Indonesian properties within two months during a government crisis. Sales to Dutch buyers later reportedly declined to about two properties a month after immediate political tensions eased.

A genuine political crisis occurred on June 3, 2025, when the Dutch government collapsed after Geert Wilders’ Party for Freedom withdrew from the governing coalition over migration and asylum policy. The remaining ministers continued in a caretaker capacity pending an election and the formation of another government.

The 80 sales nevertheless represent one developer’s internal performance. The figure does not reveal average transaction values, the Dutch share of total customers, the locations of the projects or the number of cancelled reservations. It is also not confirmed by banking flows or national statistics on Indonesian property purchases.

The increase could have reflected several factors at once, including political news, advertising, the launch of a development, the activity of Dutch intermediaries or temporary discounts. Without comparable data covering a longer period, the contribution of each factor cannot be separated.

Slovak buyers dominated one developer’s customer base

The company reported a similar change among buyers from Slovakia. Following a parliamentary election, Slovak investors allegedly became one of its largest customer groups and at one stage accounted for as much as 60% of Arya Properties’ Indonesian sales.

The percentage describes the customer structure of a single company rather than Slovakia’s position in the wider Indonesian property market. In a sample of ten transactions, six customers would already produce a 60% share. Without the absolute number of contracts, the percentage says little about the amount of capital transferred.

Slovakia’s latest parliamentary election took place on September 30, 2023. Describing it as recent in an article dated July 2026 therefore requires qualification, as almost three years passed between the vote and publication.

Investors may have been responding to subsequent government policy, taxation, relations with the European Union or broader economic uncertainty rather than to the election result alone. Confirmation of a market-wide trend would require information on capital transfers, purchase prices and transactions by citizens of other countries.

Not every political crisis is a black swan

Nassim Nicholas Taleb popularised the black-swan concept to describe a rare event that is difficult to predict, has an extreme impact and receives a convincing retrospective explanation after it occurs.

An ordinary parliamentary election does not necessarily meet that definition. The date is known in advance, political parties publish programmes and polling allows investors to consider several potential results. A government crisis may also develop over time and provide opportunities to prepare.

Political-risk flight, an urgent response to uncertainty or geographic diversification are more precise descriptions for most of the cases presented by CzechRealtor. Such shifts may be important without being unpredictable events of extreme magnitude.

The dramatic label can oversimplify an investment decision. A buyer may begin to view a foreign villa as protection from any political shock, although the new asset simultaneously creates currency, legal, construction and operating exposure.

Military conflict redirects enquiries from Dubai

Escalation in the Middle East also affected some potential buyers. Arya Properties says reports of missile attacks caused certain investors to reconsider property in Dubai and redirect enquiries towards Indonesia, Thailand and Costa Rica.

The observation cannot be applied to the entire United Arab Emirates market. Dubai remains a major international property centre with substantial foreign demand, formal transaction registration and a liquid pipeline of new developments.

The developer’s experience illustrates a narrower point: individual investors can change search locations quickly when perceived safety changes faster than property prices or forecast returns. This is most common among buyers who have not signed final contracts or transferred the principal amount.

Moving geographically does not eliminate risk. Military escalation can raise fuel prices, reduce international flight capacity and weaken tourism demand even in distant countries. An Indonesian resort villa remains dependent on air access, traveller incomes and political decisions in its main source markets.

Professional investors calculate net income

Professional investors account for about 30% of Arya Properties’ clientele, according to the company. These buyers are more likely to compare several countries, distribute capital among different properties and change direction when risk-adjusted returns deteriorate.

The relevant figure is not an advertised yield but net cash flow. Rental income must be reduced by management fees, repairs, insurance, taxes, utilities, marketing expenses, intermediary commissions and vacancy periods.

Exit conditions are equally important. A projected annual return of 10% or 12% offers limited protection if the property cannot be sold without a large discount or if resale demand depends entirely on the original developer’s marketing network.

Broader European data do not indicate that professional capital is abandoning established markets. In CBRE’s 2026 survey, 89% of respondents expected purchasing activity to increase or remain steady. Living assets were the preferred sector for the second consecutive year, while cross-border investors continued to target major European markets.

Exotic destinations therefore appear more likely to supplement the portfolios of selected investors than to replace European holdings. Their transaction volumes can rise quickly from a low base while remaining a small part of total invested capital.

Foreign buyers do not receive ordinary land freehold

The principal difference between Czech property and an Indonesian villa concerns the legal interest acquired. A foreign individual does not receive the ordinary perpetual freehold land title reserved for Indonesian citizens.

Indonesia’s Government Regulation No. 18 of 2021 provides several forms of ownership and use. A right to use state land or land under a management title may be granted for up to 30 years, extended for another 20 years and renewed for up to 30 additional years. The combined term can reach 80 years if all requirements are satisfied, but extensions are not automatic and must be registered.

Foreigners with the appropriate immigration documents can also own certain apartment units. The 2021 reform expanded access to strata-title ownership in buildings constructed on land carrying a right-to-build title, but it did not provide unrestricted perpetual ownership of the underlying land.

Resort villas are frequently sold through long leases, right-to-use titles or foreign-investment companies. Buyers must verify the landowner, the initial term, renewal provisions, permitted building use and whether the interest can be transferred to heirs or another investor.

Nominee ownership structures require particular caution. The land may be formally registered to an Indonesian citizen while the foreign investor relies on side agreements and powers of attorney. In a dispute, the investor may discover that no direct registered land interest exists in their name.

A low-cost villa may become an expensive investment

The purchase price covers only the first stage. Tropical property requires regular protection from humidity, more frequent exterior maintenance, pool servicing, pest control and replacement of equipment exposed to heat and salt.

Management fees, marketing, tax, insurance and legal administration must also be included. Revenue depends on seasonality, occupancy, guest reviews, direct flights and the amount of competing accommodation entering the market.

Currency exposure can materially alter the outcome. An investor may receive rent in Indonesian rupiah, pay some costs in US dollars and measure returns in euros or Czech koruna. Stable local revenue does not guarantee a stable return after conversion.

Resale is another constraint. Prague has a broad pool of local purchasers, tenants and lenders. An island villa may depend primarily on foreign buyers and on the marketing network of the company that originally sold the development.

The correct comparison is therefore not simply between a Prague garage and an Indonesian villa. Investors need to compare the legal title, holding period, net income, management costs, liquidity and likely exit value of each asset.

Diversification requires verification rather than urgency

Overseas property can reduce dependence on a single country, currency and economic cycle. This benefit emerges only when assets are genuinely distributed across independent markets and the investor holds enforceable rights to each property.

A villa purchased in response to alarming political news can produce the opposite effect. The buyer exchanges a familiar European risk for a combination of unfamiliar land law, currency volatility, tourism seasonality and reliance on a local management company.

Before signing a contract, investors should verify the land title, building permit, short-term rental permission, tax position and financial condition of the developer. Expected returns should be calculated under several occupancy scenarios, including an adverse case.

As International Investment experts report, high Czech housing prices are generating genuine demand for overseas alternatives, but one developer’s internal figures do not establish a broad transfer of European capital into Indonesia. Elections and government crises should not automatically be classified as black swans because their probability can often be considered in advance. Exotic property strengthens a portfolio only when the title is enforceable, net income is realistic and an independent secondary market exists. An urgent purchase following a political shock may replace one visible risk with several hidden ones.

FAQ on crises and overseas property

Why is property popular among Czech investors?

Housing is regarded as a tangible and familiar asset that can be occupied, rented or transferred to heirs. Previous price appreciation has also strengthened its reputation as a store of value.

Why are Czech investors purchasing property abroad?

The main reason is the high cost of homes in the Czech Republic, particularly in Prague. Foreign developments may offer a lower entry price, potential rental income and personal holiday use.

Do 80 Dutch transactions prove a major capital outflow?

No. The figure relates to the sales of one developer over a limited period. It does not represent total Dutch overseas investment and has not been confirmed by national market statistics.

Can an election be a black-swan event?

Usually not. Election dates and major political scenarios are known in advance. A genuine black swan is rare, highly consequential and exceptionally difficult to predict.

Can a foreigner own land in Indonesia?

Foreign individuals cannot hold the ordinary perpetual freehold land title. Available structures include right-to-use titles, long leases, ownership of qualifying apartment units and corporate arrangements that comply with Indonesian law.

What should be checked before purchasing a villa?

A buyer should verify the registered land title, contract duration, renewal procedure, building and rental permits, tax liabilities, management company, operating costs and resale options.

Does overseas property protect against political risk?

It can reduce dependence on one country, but it also creates legal, currency and operating risks. Protection requires genuine diversification rather than an urgent transfer of all capital into one overseas development.