The prices of apartments in Prague have caught up with the union

PRAGUE - According to today's Hospodářské noviny, some apartments in Lisbon, Amsterdam, or Barcelona can now be purchased for the same price as in Prague. For three million crowns, it is possible to buy a new two-room apartment both in Prague 8 and in the quiet neighborhood of Harlem, which is basically a suburb of Amsterdam, as an example.
According to HN, some apartments in recreational areas of the union can even be bought cheaper than in Prague. For instance, on the mainland coast of northeastern Spain, in Portugal by the Atlantic, or in the western part of the French Mediterranean - from Marseille to the city of Perpignan. Here, prices for small summer apartments of up to 50 square meters can even be found under three million crowns, the newspaper states, citing data from the international real estate server Worldwide.com and its own calculations.
It also notes that prices in Prague are expected to rise again this year for most new apartments. The president of the Czech Real Estate Association, Jaroslav Novotný, estimates the increase to be around three to four percent. In some places - particularly in luxury locations - their prices could even rise by as much as ten percent, HN writes.
According to HN, the increase in prices is likely to be influenced by the decision made by the finance ministers of EU member states on Tuesday, who in Brussels definitively approved the transfer of VAT on construction work in the Czech Republic from the current five to 19 percent. The exception for the lower tax will end in December 2007. However, the government should define a group of "social" apartments, for which the lower tax rate would continue to apply. The definition of social housing will be discussed today.