Value for Money – LandCheck

Let’s assume your land satisfies all must have criteria i.e. it is feasible to construct your dream house on the land. At that point the main question is whether it’s worth the money. In this article, we are sharing our views that might be helpful when considering it.

Main price drivers

Land value / price mainly varies depending on the allowed land use. Price of agriculture land can be as low as 15 CZK per square meter whereas land for single family house construction costs typically between 500 and 10 000 CZK per square meter depending on location and other factors. 500 CZK per square metre would be expected in the least expensive Czechia regions whereas 7 000 – 10 000 CZK per square metre can be expected in premium locations (e.g. just outside of Prague). Assuming a typical plot size of 800 – 1 000 square metres, you can expect a price of 8 – 10 CZK million in a premium location. Prices in locations with good connection to major cities can be expected over 1000 CZK per square metre.

On this website we only consider land meant for construction of single family houses. The following are selected factors with impact on construction land prices:

Location: The most significant price driver for any land and definitely for land meant for construction. A horrendous piece of land near Prague will cost much more than an all-around perfect land in a remote Czech region. Further the location within the general area is important – land just next to a major road with views on a factory has considerably lower value than one in a calm residential area neighbouring a forest.
Land slope: Constructing a common house in a hilly area costs substantially more than on a flat land because of the required ground works. It appears sometimes the ask prices don’t reflect this enough – we have seen many offers of extremely sloped land for fairly normal prices where it would be very difficult to construct the house. For an example, see Figure 1 below.
Land size: larger land plots tend to be somewhat less expensive per square metre than small land plots (as long as the small plot is still large enough to construct a house). This is because the value of the land to be used as garden is not as valuable to most as the land used for the house itself. Many owners don’t require a large garden.
Land shape: impractical complicated land shapes may get a small discount relative to a standard square or rectangle shapes.

Difference in ask prices and transaction (fair) prices

Real estate is fairly illiquid and prices listed by owners can be significantly above fair market price. Unlike in every other market, bargaining is very common and to some extent expected (even though some sellers will be disagreeable if you ask for a price reduction).

It’s difficult to say how much the mark-up is on average, but it is clear that it is specific to each offer as per seller’s time preference and ambition. Many sellers have the strategy of first trying to set the price higher and hope that a wealthy buyer appears, and reduce the price later if unsuccessful. We recommend bargaining especially when it’s clear the property has been unsuccessfully offered for a long time, or if there’s clear evidence that the ask price is significantly higher than market price in the given location.

Online price estimators and their drawbacks

If you are considering buying a valuable land you can always consult a professional to estimate fair value, although for some land plots this might not be worth the money. There are a few available online price estimators for real estate, which work for land such as https://www.odhad-zdarma.cz/. Typically these are either based on an input price map data and in some cases can be useful price point. However, they generally disregard several important factors – the most significant being whether it’s actually feasible to construct the house on the given land! Online estimators have no way of incorporating up-to-date information from the spatial plan or knowing if there’s a K. O. problem with the land such as protection zone of the gas pipeline, a nasty easement or. problem with access road. This is simply because these key inputs for price/value cannot possibly be automated. Therefore, our advice is never to fully rely on an online estimator.

Realized price data from the official land cadastre

In our view the best source is the official land cadastre. The cadastre contains real transaction price for any real estate sold in the Czech Republic since 2014. We recommend always checking realized transaction prices of land most similar to yours. It costs only CZK 50 per page (which will typically fit around 5-8 transaction points), which significantly lower than you’d pay for a professional appraisal.

However, this source is not easy to access. Firstly, the important parts of the website are in Czech only. Below, we provide a 5-step summary how you can achieve this:

You need to get a personal account that enables the access. This is the most difficult step as it involves either sending a physical letter or a message throught the official electronic mail protocol “datova schranka” (or mail box). The instructions are available in English here.
Use the remote browsing tool https://nahlizenidokn.cuzk.cz/ (no account required for this part) to find the properties with available price data, using the right menu (Vrstvy – Nemovitosti s cenovymi udaji). See Figure 2 below for details.
Login to your personal account here and select “Cenové údaje podle nemovitostí”. See Figure 3 below.
Select the analysis date (typically the most recent available date) and the cadastre area (the municipality), and add a few specific land plots to the selection. See Figure 4 below for details.
You will obtain a PDF with details of the land (including square footage), date of transaction and realized . You will be issued an invoice for the amount (50 CZK per page) if you view/download the PDF.

Happy price benchmarking!