CZECH POINT 101 interviews one of their tenants in Bozetechova who has been a tenant since March 2009 about what it is like renting from us. Vanesa Grabon responds to questions such as how they found us, whether they paid a real estate commission or fee, what do they like and what do they not etc. Interview is all in the Czech language with main descriptions in English sub-titles.

The names of two tenants who have paid their rent on time for the last 3 months are rewarded with two digital photo frames! Afterward we interview one of the winners, who lives in this project in Bozetechova.

I apologize but because of personal holidays and staff holidays two updates were combined into one.

1. Czech Central Banker Sees Rates at Record Low for ‘a While’
(http://www.businessweek.com/news/2010-07-08/czech-central-banker-sees-rates-at-record-low-for-a-while-.html)

High-level overview of article:
Czech central bank Governor Miroslav Singer, who took office last week, said interest rates are likely to remain at a record low for “quite a while.”

Our take:
Good news and hopefully lending rates will also stay down.


2. Inflow of FDI to Czech Republic up at CZK 53.3bn in Q1
(http://praguemonitor.com/2010/07/09/inflow-fdi-%C4%8Dr-czk-533bn-q1)

High-level overview of article:
The inflow of foreign direct investments (FDI) to the Czech Republic rose by Kc17.3bn on the year to Kc53.3bn in Q1 2010, according to an analysis of the Czech economy released by the Industry and Trade Ministry yesterday.

Our take:
Last year was extremely low so it is no surprise to see these types of growth numbers.


3. Analysts: Situation in Czech industry improving
(http://praguemonitor.com/2010/07/12/analysts-situation-czech-industry-improving)

High-level overview of article:
The industrial output growth in May indicates improvement in the Czech industry, analysts polled by CTK said Friday.

Our take:
This is great news as industry is such a fundamental element of the health of the Czech economy.


4. Unemployment rate estimated to be flat in June
(http://praguemonitor.com/2010/07/12/unemployment-rate-estimated-be-flat-june)

High-level overview of article:
Analysts polled by CTK estimated that the Czech unemployment rate will be flat in June and if it decreases, it will only be by one or two-tenths of percentage point from May’s 8.7 percent.

Our take:
Slightly less than the EU average so things are looking good for the recovery.


5. Czech jobless rate down at 8.5 pct in June
(http://www.financninoviny.cz/english/zpravy/czech-jobless-rate-down-at-8-5-pct-in-june/502332)

High-level overview of article:
The jobless rate in the Czech Republic decreased by 0.2 percentage point month-on-month to 8.5 percent in June, compared with 8 percent in June 2009, the Labour and Social Affairs Ministry said today.

Our take:
Fantastic news and it looks like unemployment will not hit 10% as analysts had predicted.


6. June inflation 0.3 pct point higher than ČNB forecast
(http://praguemonitor.com/2010/07/13/june-inflation-03-pct-point-higher-%C4%8Dnb-forecast)

High-level overview of article:
Czech June year-on-year inflation was 0.3 percentage point higher than the Czech National Bank (CNB) had estimated in its latest forecast, Tomas Holub, executive director of the CNB’s Monetary and Statistics Department, said.

Our take:
Evidence of growth and this will be good to strengthen the currency.


7. Analysts: Inflation to grow, won’t be problem for Czech economy
(http://praguemonitor.com/2010/07/13/analysts-inflation-grow-wont-be-problem-economy)

High-level overview of article:
Czech year-on-year inflation will accelerate in the coming months to 2 percent, but the growth will not present a problem for the economy as it will be a result of comparison with last year’s data, economists told CTK in a poll.

Our take:
Excellent forecasts for stable growth over the next period.


8. FinMin improves 2010 GDP growth estimate to 1.6%
(http://praguemonitor.com/2010/07/16/finmin-improves-2010-gdp-growth-estimate-16)

High-level overview of article:
The Czech Finance Ministry improved GDP growth estimate for this year to 1.6 percent from the previous 1.5 percent, according to data in the ministry’s new forecast made public Thursday.

Our take:
Things are picking up.


9. Commercial leasing comeback; 147% Y-o-Y
(http://www.praguepost.com/business/5097-commercial-leasing-comeback.html)

High-level overview of article:
In the second quarter of 2010, transactions totaled 221,600 square meters (2.4 million square feet), a 41 percent growth on the previous quarter and 147 percent rise on the year, according to a new report released by DTZ, a global real estate adviser. The report came on the heels of another positive indicator for the sector, as industrial output in the Czech Republic grew 16.9 percent year on year in May.

Our take:
Very good information that the demand in Brno for space is strong and that there is less supply. We should see some existing projects get finished and even new ones started such as the AZ Tower which aims to become the highest mixed use building of its kind in the country.

We reward tenants who pay their rent on time! Every three months we draw two names of tenants of ours who have paid their rent on time for the previous three months.

This month the prizes are two digital photo frames – to share all your summer memories! Check back next week to watch a video as the two winners are drawn.

Contact us for commission free flats for rent in Prague, Brno or Ostrava

1. Czech Policy Maker Says Interest Rates Could Rise This Year
(http://www.businessweek.com/news/2010-06-14/czech-policy-maker-says-rates-could-rise-this-year-update1-.html)

High-level overview of article:
The Czech central bank may consider increasing interest rates before the end of the year if economic recovery is stronger than forecast, policy maker Eva Zamrazilova said.

Our take:
I really don’t see how these rate decreases are affecting businesses and consumers when they aren’t getting passed on by the banks. Can anyone illuminate me on this?


2. Czech National Bank says flat prices rose too high and should fall
(http://www.radio.cz/en/article/128944)

High-level overview of article:
A new report by the Czech National Bank warns that flats in the Czech Republic are overpriced in spite of recent falls and prices could slide still further. The report says rent and wage rises failed to keep pace with that price explosion, which started to put flats out of reach of ordinary earners.

Our take:
Wow, this is the exact opposite of what we expected would happen over the next 12 to 18 months. Is the cost of housing here really so unaffordable compared to other countries?


3. Czech Central Banker Says Growth to Boost Crown (CZK) Over Next Few Years
(http://www.iii.co.uk/news/?type=afxnews&articleid=7952624&subject=economic&action=article)

High-level overview of article:
The Czech economy will grow at a slower rate than in previous years, but will outpace developed EU states in coming years and raise the value of the crown in the long term, central bank policymaker Robert Holman was on Monday quoted as saying.

Our take:
This should be good additional motivation for investors to hold out for property prices and currency to improve before selling.


4. Czech Bank Leaves Rates Unchanged, Signals Stability
(http://www.businessweek.com/news/2010-06-23/czech-bank-leaves-rates-unchanged-signals-stability.html)

High-level overview of article:
The Czech central bank left its benchmark interest rate unchanged after an unexpected cut in May and said borrowing costs were likely to hold steady in the near term.

Our take:
Good news for investors with mortgages.


5. Transactions on Czech real estate market down 46% in 2009
(http://praguemonitor.com/2010/06/25/transactions-czech-real-estate-market-down-46-2009)

High-level overview of article:
The volume of transactions on the Czech real estate market sank by 46 percent year-on-year to EUR512m (Kc13.2bn) last year, according to Trend Report 2010 of the Association for Real Estate Market Development (ARTN).

Our take:
With these kinds of numbers I would dare to say that we have reached the bottom.


6. Wages in ČR to grow 3% in 2010, almost 5% in 2011
(http://praguemonitor.com/2010/06/25/wages-%C4%8Dr-grow-3-2010-almost-5-2011)

High-level overview of article:
The average nominal wage in the Czech Republic could grow by 2.1 to 3.1 percent this year and by 3.9 to 4.9 percent in 2011, the Ministry of Labour and Social Affairs has said.

Our take:
This would support the view of more pressure on the real estate market.


7. Confidence in Czech economy up by 0.6 point in June
(http://praguemonitor.com/2010/06/25/confidence-czech-economy-06-point-june)

High-level overview of article:
Confidence in the Czech economy grew slightly month-on-month in June, the composite confidence indicator adding 0.6 point against May, the Czech Statistical Office (CSU) said Thursday.

Our take:
Confidence is essential.

1. Businesses welcome election result, hope for needed reforms
(http://praguemonitor.com/2010/05/31/businesses-welcome-election-result-hope-needed-reforms)

High-level overview of article:
Czech businesses have welcomed the results of the general election, hoping that the centre-right coalition government will carry out the necessary reforms of the pension and health care systems and stop the country’s debt growth, according to a CTK poll.

Our take:
Stability is good!


2. FinMin: Economy will grow by 1.5% on average this yr
(http://praguemonitor.com/2010/05/31/finmin-economy-will-grow-15-average-yr)

High-level overview of article:
Czech economy will grow by 0.8 to 1.9 percent this year, which makes 1.5 percent on average, according to a regular survey the Finance Ministry has conducted among fifteen domestic institutions.

Our take:
We are all hoping for the upper end of the spectrum.


3. Analysts: Average wage up by 2-2.5% in Q1
(http://praguemonitor.com/2010/06/07/analysts-average-wage-2-25-q1)

High-level overview of article:
The average wage in the Czech Republic grew by 2 to 2.5 percent year-on-year in the first quarter of this year, according to estimates of most analysts polled by CTK Friday.

Our take:
Slow growth but it is growth and unemployment has been holding steady so this is positive.


4. Inflow of FDI to Czech Republic falls by over half in 2009
(http://praguemonitor.com/2010/05/31/inflow-fdi-%C4%8Dr-falls-over-half-2009)

High-level overview of article:
The inflow of foreign direct investment to the Czech Republic fell to Kc52.2bn in 2009 from Kc110.1bn in 2008, the Industry and Trade Ministry has said.

Our take:
Not a good number to decrease but considering that most international businesses went into a ‘wait and see’ mode, this is still impressive.


5. Exports Fuel Czech Recovery, Falling Sales Signal Stable Rates
(http://www.businessweek.com/news/2010-06-07/exports-fuel-czech-recovery-falling-sales-signal-stable-rates.html)

High-level overview of article:
Rising Czech exports fueled an economic recovery in April and a drop in household spending showed a lack of inflationary pressure, signaling stable interest rates.

Our take:
Slow but steady.


6. Analysts: Unemployment in ČR falls below 9% in May
(http://praguemonitor.com/2010/06/08/analysts-unemployment-%C4%8Dr-falls-below-9-may)

High-level overview of article:
Unemployment in the Czech Republic continued to fall in May, and the number of job seekers registered at employment offices dropped below 9 percent from 9.2 percent in April, analysts have told CTK in a poll.

Our take:
This is very close to the EU average of 9.5% which was recorded in January 2010. Earlier pessimistic predictions of 10% + will probably not be seen.


7. Unemployment in Czech Republic down 0.5 pts to 8.7 pct in May
(http://www.financninoviny.cz/english/zpravy/unemployment-in-cr-down-0-5-pts-to-8-7-pct-in-may/488149)

High-level overview of article:
Unemployment in the Czech Republic decreased by 0.5 percentage point year-on-year to 8.7 percent in May, the Labour and Social Affairs Ministry announced today.

Our take:
Better than analysts expected in the article above!


8. Banks hike service fees
(http://praguepost.com/business/4697-banks-hike-service-fees.html)

High-level overview of article:
Several major banks are taking advantage of the slower summer months to institute higher user fees, including Komerční banka and Raiffeisenbank, which announced that clients would pay higher costs for their services from July and August, respectively.

Our take:
How does this story equate with this one: http://praguemonitor.com/2010/06/01/net-profit-banks-%C4%8Dr-grows-czk-138bn-q1 about net profit growing 16% overall in Q1 year over year? How long can they keep claiming possible defaults from the crisis for increasing their profits?


9. Czech Economy, Prices Grow; Interest Rates May Follow
(http://www.businessweek.com/news/2010-06-09/czech-economy-prices-grow-interest-rates-may-follow-update2-.html)

High-level overview of article:
The Czech economy expanded on an annual basis in the first three months for the first time in five quarters, paving the way for the central bank to tighten policy in the second half of the year.

Our take:
Good progress in the first quarter.

1. ČR’s rating not at risk of being downgraded in short term
(http://praguemonitor.com/2010/05/26/%C4%8Drs-rating-not-risk-being-downgraded-short-term)

High-level overview of article:
Representatives of rating agencies Fitch Ratings and Moody’s agreed ahead of the Czech general elections that the Czech Republic’s rating is not at risk of being downgraded in the short term.

Our take:
Some stability in the EU is possible.


2. Rocky road for real estate developers
(http://praguepost.com/business/4535-rocky-road-for-real-estate-developers.html)

High-level overview of article:
It’s been a “hectic” year for Orco Property Group, according to CFO Nicolas Tomassini, but the company is further away from the precipice after it recently emerged from a court-ordered protection from creditors that had sheltered the firm for one year. The Czech Republic’s other big development company, ECM REI, is meanwhile facing a bondholder meeting June 3 to decide whether the company will have to face early repayment of bonds.

Our take:
Once the current projects completed over the last six months are sold out we should see a shortage of new units toward the middle of 2011.

1. Survey: One-quarter of Czech firms plan to lay off staff
(http://praguemonitor.com/2010/05/06/survey-one-quarter-czech-firms-plan-lay-staff)

High-level overview of article:
Around one-quarter of companies in the Czech Republic plan to cut staff numbers, while 18 percent of businesses intend to raise the number of their employees, according to results of a survey carried out by the Confederation of Industry in April.

Our take:
So 25% are laying off and 18% hiring. Net effect should not be too bad.


2. Czech jobless dropped to 9.2% in April
(http://praguemonitor.com/2010/05/06/czech-jobles-dropped-92-april)

High-level overview of article:
Czech jobless rate fell to a level slightly above 9.2 percent in April from 9.7 percent in March, according to preliminary data of the Labour and Social Affairs Ministry, Minister Petr Simerka said Wednesday.

Our take:
Very good news and quicker, I think, than analysts predicted.


3. Analysts predict Czech annual inflation above 1% in April
(http://praguemonitor.com/2010/05/06/analysts-predict-czech-annual-inflation-above-1-april)

High-level overview of article:
Czech year-on-year inflation accelerated to 1.1-1.2 percent in April from 0.7 percent in March due to higher prices of food, gas for households and motor fuels, analysts polled by CTK said Wednesday.

Our take:
This is not strong enough to effect the exchange rate of the CZK very strongly.


4. Czech Central Bank Unexpectedly Cuts Rates to Record
(http://www.businessweek.com/news/2010-05-06/czech-central-bank-unexpectedly-cuts-rates-to-record-update2-.html)

High-level overview of article:
The Czech central bank unexpectedly lowered the benchmark interest rate by a quarter-point to a record low to help shelter an economy struggling to recover momentum from the impact of the Greek debt crisis.

Our take:
Wow, this is big. Will we see banks follow suit or will it only increase their profits?


5. ČNB expects crown to firm slightly to CZK 25.30/EUR this year
(http://praguemonitor.com/2010/05/07/%C4%8Dnb-expects-crown-firm-slightly-czk-2530eur-year)

High-level overview of article:
The latest forecast of the Czech National Bank (CNB) expects the crown to strengthen slightly to around Kc25.30 to the euro this year, while at the beginning of February the CNB expected it at Kc25.50 per euro, CNB Governor Zdenek Tuma said Thursday.

Our take:
About a 4% strengthening of the CZK. Good news for investors.


6. 50% of Czech Real Estate Transactions Outside of Agents – Try to Improve Image
(http://www.czechnewsdaily.com/post/591657834/real-estate-agents-concentrate-on-education)

High-level overview of article:
Realtors are trying to regain the trust of people who are selling or buying property. Roughly one half of the business is conducted without the assistance of real estate agents.

Our take:
Use our power of attorney sale service and you will get the best of both worlds.


7. Czech inflation in April higher than central bank’s estimate
(http://praguemonitor.com/2010/05/11/czech-inflation-april-higher-central-banks-estimate)

High-level overview of article:
Czech year-on-year inflation in March was 0.2 percentage point higher than the Czech National Bank (CNB) predicted in its latest forecast, Tomas Holub, head of the CNB’s monetary and statistical section, told CTK yesterday.

Our take:
Pretty close to estimates. No surprises here.


8. Czech GDP Grows on Annual Basis for First Time in Five Quarters
(http://www.businessweek.com/news/2010-05-12/czech-gdp-grows-on-annual-basis-for-first-time-in-five-quarters.html)

High-level overview of article:
The Czech economy grew on an annual basis in the first three months of the year for the first time in five quarters as a recovery in western Europe stimulated demand for its exports.

Our take:
Yahh! Good news. What are your thoughts on how the rest of 2010 will go?

1. Investments into commercial real estate in ČR up 65% in Q1
(http://praguemonitor.com/2010/04/21/investments-commercial-real-estate-%C4%8Dr-65-q1)

High-level overview of article:
Investments into commercial real estate in the Czech Republic jumped by 65 percent year-on-year to EUR96m (Kc2.4bn) in the first quarter, real estate consulting company DTZ told CTK Tuesday.

Our take:
Interesting that the majority of buyers were from Czech Republic showing that locals feel the time to buy is right.


2. IMF Raises 2010 Economic Growth Outlook for East Europe to 2.8%
(http://www.businessweek.com/news/2010-04-21/imf-raises-2010-economic-growth-outlook-for-east-europe-to-2-8-.html)

High-level overview of article:
The International Monetary Fund raised its 2010 growth forecast for the economies of central and eastern Europe to 2.8 percent as global trade recovers.

Our take:
No estimate on Czech Republic in this article but Slovakia pinned as largest growth with 4.1%. Seems like EURO currency is treating them ok.


3. Confidence in Czech economy up 3.4% in April
(http://praguemonitor.com/2010/04/27/confidence-czech-economy-34-april)

High-level overview of article:
Confidence in the domestic economy grew by 3.4 points in April against March, and compared with the low level seen in April 2009, the composite confidence indicator was 14 points higher, the Czech Statistical Office (CSU) announced yesterday.

Our take:
Maybe it was just because of the sunshine


4. Banks grant mortgages worth CZK 16bn to citizens in Q1
(http://praguemonitor.com/2010/04/28/banks-grant-mortgages-worth-czk-16bn-citizens-q1)

High-level overview of article:
Czech banks granted mortgage loans worth Kc16bn to citizens in the first quarter of this year, down by 6.7 percent year-on-year, the Local Development Ministry said yesterday.

Our take:
Now comparisons are to the absolute slowest periods of mortgage granting in the last years, early 2009. All numbers will look positive.


5. LN: Deposits on current accounts at banks top CZK 700bn
(http://praguemonitor.com/2010/04/28/ln-deposits-current-accounts-banks-top-czk-700bn)

High-level overview of article:
Czech households’ deposits on current accounts at banks exceed Kc700bn and are 11 percent higher year-on-year, the daily Lidove noviny (LN) writes yesterday.

Our take:
This is phenomenal and a big reason why the property market stayed buoyant during the crisis. Just reminds us how the banks here are making huge profits with all this money for free and lending it back out at ridiculous rates.


6. Czechs See Faster 2010 Growth, Recovery Stays Fragile
(http://www.businessweek.com/news/2010-04-29/czechs-see-faster-2010-growth-recovery-stays-fragile-update1-.html)

High-level overview of article:
The Czech economy will grow faster this year than previously expected as a better outlook for exports to the country’s main trading partners in western Europe drives a “fragile” recovery, the Finance Ministry said.

Our take:
We love upward revisions!

1. Offer prices of flats fall 1.3% in Q1
(http://praguemonitor.com/2010/04/14/offer-prices-flats-fall-13-q1)

High-level overview of article:
Offer prices of flats in the Czech Republic continued to fall in January-March, dipping by 1.3 percent compared with the last quarter of 2009, according to the latest data of the Czech Statistical Office (CSU).

Our take:
Interesting details regarding 2009 that new flat prices dropped overall by 7.1% and older flats by 9.4% on average. We don’t expect prices to fall much below this point.


2. Czech residential market requires government stimulus
(http://www.cbw.cz/article/czech-residential-market-requires-government-stimulus.aspx)

High-level overview of article:
The Czech residential market has hit bottom and is seeing signs of impending recovery, yet according to a study recently issued by consultancy Deloitte Touche Tohmatsu and mortgage service Hyposervis the ultimate responsibility for the sector’s health rests with the state, which must create the necessary initiatives to reignite activity among buyers, developers and investors.

Our take:
The last paragraph is the most interesting with a survey regarding where people think the market is headed over the next year or so!