For those of you who are planning to sell or buy land, one of the most crucial aspects to bear in mind is verifying the market price, which is the topic of this article. After reading it, you’ll have everything you need to determine the price successfully. We’ll walk you through the process of finding out the market price of land on which to build a family house in the Czech Republic, step by step. So, let’s dive in.
What is the market price of land?
First of all, let’s clarify what we mean by “market price,” a term we’ll be using a lot in this article. It’s the price at which comparable plots of land (in terms of size and quality) have recently sold in the same location, typically within the last 12 months. So, to get to this figre, we need information about recent sales in that specific area.
Nowadays, you can easily find this information using online applications that provide real data from property registries of real estate transactions in the Czech Republic. This is the best source of information. For land sale prices, we recommend using the cenovamapa.cz application.
What factors influence the final market price of real estate in the Czech Republic?
There are two main factors that determine the final price of land. The first factor is the quality of the land. Every piece of land has its pros and cons, which ultimately affect its attractiveness and, consequently, its price. The second factor is the subjective circumstances on the side of the seller or buyer, and these are unique in every transaction.
Qualities of land that impact the final market price
Each plot of land has different shapes, locations, building possibilities, and so on. All of these factors affect the market price. In the table below, I‘ve listed all the known qualities of land and quantified their impact on the market price:
| Property | Impact |
| Noise | -10 to -20 % depending on the intensity |
| Area at risk of flooding | -10 to -20 % depending on flood level |
| Sloping or irregularly shaped land | -10 % / according to slope / gradient |
| Lack of access easement (right of way) to the land | serious / not possible to get a building permit |
| No established utilities | -10 % / depending on the cost of construction |
| Land encumbered with easements (rights of way) that reduce usability | -10 % / depending on the impact of restrictions |
| Land affected by protective zones (electricity, waterworks, forests, etc.) | -10 % / depending on the impact of restrictions |
| Unpleasant surroundings (factories, warehouses, unsightly buildings, etc.) | -10 % |
| Problematic neighbor | -10 to -20 % |
| Near a forest or park | +10 to 20 % |
| Scenic views | +10 to 20 % |
| North-facing | -5 % |
| South-facing, southeast-facing, southwest-facing | +5 % |
| Non-standard restrictions as a result of zoning plans | depending on the severity |
So, when determining the market price, we need to follow these steps:
- Use an application (for land, we recommend www.cenovamapa.cz) to search for information about sales of similarly sized plots in the desired location.
- Limit the information to sales that took place within the last 12 months.
- Organize the selling prices per square meter from the lowest to the highest.
- Exclude prices that significantly deviate from the majority of the selling prices (if they are too low, they might involve non-market conditions such as family transactions, or also if they are too high).
- Estimate where the price per square meter of the identified plot falls within this price range. Use the table of land qualities/properties mentioned above to determine the price. For example, a square-shaped plot in a quiet area will have a market price close to the highest price in that location, while a narrow plot near a busy road will have the lowest price within the range.
- Calculate the total market price of the land by multiplying the land’s size by the price per square meter.
Subjective factors that influencing the final market price
These factors can be on the seller’s side or the buyer’s side. Each party enters the deal with different motivations and positions, and the interplay between these factors significantly impacts the price. In fact, these subjective factors can account for around 10% of the total price. So, if the calculated price per square meter of the land is, for example, 2000 CZK, it doesn’t mean that the land can’t be sold for 1800 CZK or 2200 CZK per square meter. It all depends on the subjective circumstances of the sale.
For the buyer, motivation plays a significant role. If they are buying purely for investment, they will be looking for a financially attractive offer. If they intend to use the property for personal residence and have friends or family living nearby, they may be willing to pay more. Other offers in the vicinity also influence the decision. If the market in the area is competitive, the buyer may be more inclined to accept the price, while in a saturated market, they may expect a better deal. Financial capabilities also matter, as some buyers have stronger financial positions than others. Finally, the timing of the purchase affects the decision. If the buyer is in no hurry, they may have time and patience to wait for an attractive offer. However, if they have family plans and need to build quickly, they might make a very swift decision.
For the seller, the readiness of the land is essential. If the land is overgrown or cluttered with debris, it will appear less attractive than a well-maintained plot. The timing of the sale can also be crucial. Selling in December, when demand is lower, might result in a lower selling price compared to, for example, April, which marks the start of the main selling season in the Czech Republic. Urgency for money can lead to a lower final selling price, such as when funds are needed for the purchase of another property or to settle family matters. Personal preferences can also influence the decision. Not everything revolves around money; sometimes, sellers may prioritize a lower selling price if they have a strong affinity for the prospective buyers.
What to do when there is lack of information for valuation
There are two ways to deal with a lack of information for valuation. The first is to include older sales beyond the 12-month limit, but if you do this you must consider the price trends in the Czech Republic. Currently, prices are rising, so you should adjust older prices accordingly. The index of property price changes published by ČSÚ can help with this. The second option is to expand the search area for completed sales. However, ensure that the locations you consider are qualitatively comparable to the one you’re valuing. Usually, nearby towns have comparable prices, but this may not always be the case, so you must have a good understanding of the specific area.
For more information, you can also read our article on Land Price Estimation. Or, if you’re interested in valuation topics, then take a look at our recent article on Property Valuation.
Do you need advice on how to proceed when selling a property? Are you planning to sell, but you don’t want to go it alone? At Kotula Prague Realtor, we’ll take you through the sale process from price estimation to the final contract signing, and we’ll make sure you get the maximum value for your property. Contact us!
Photo: RyanKing999, Getty Images via Canva.com
