Summary
The key drivers of the Prague property market are;

• Czech economy is performing strongly (Q1 2007 GDP growth of 7.4%) compared to both the Euro Zone and Eastern Europe (Poland 5.2%, Hungary 4.6%).
• Czech Republic continues to attract huge investment from foreign companies creating new high paid jobs near urban locations.
• The increase in the average monthly wage of circa 50% since 1998 has greatly increased the number of locals that can afford mortgage payments. .
• The Czech mortgage market is very young and there is huge potential for the growth in the mortgage volumes to fuel the property for the next 5-10 years.
• Czech interest rates are low with locals able to borrow up to 100% of the cost of new home at rates of 3.5%. This is becoming increasingly attractive for young people where they still live with their parents.
• 45% of the housing stock in Prague is the old communist apartment blocks (called Panelaks) which are often in a bad state of repair and so there is a desire among locals to move out of these Panelaks in the longer term.
• Regulated rent in Prague is being phased out by the government and so creating additional demand for new build apartment rentals and sales.