1. Construction of new flats in Czech Republic down 14.3% last year
(http://praguemonitor.com/2010/02/22/construction-new-flats-%C4%8Dr-down-143-last-year)

High-level overview of article:
Construction of 37,319 flats started in the Czech Republic in 2009, a year-on-year drop of 14.3 percent, the Czech Statistical Office (CSU) said Friday.

Our take:
We feel this should be a positive factor for property prices in 2010.


2. INTERVIEW: Komercni CEO Eyes Mortgage Growth, Slovak Buys
(http://online.wsj.com/article/BT-CO-20100224-706343.html?mod=WSJ_latestheadlines)

High-level overview of article:
Czech retail bank Komercni Banka AS (BAAKOMB.PR) is sharply easing its criteria for mortgage lending to fuel an increase in market share, while also eyeing acquisitions in Slovakia, the company’s chairman and chief executive officer said.

Our take:
Good news on easing of mortgage lending requirements. Hopefully will include some easing for foreigners also.


3. Benchmark interest rate to rise to 3.5% by end-2012
(http://praguemonitor.com/2010/03/01/benchmark-interest-rate-rise-35-end-2012)

High-level overview of article:
The Czech National Bank (CNB) benchmark interest rate should get to a neutral level around 3.5 percent at the end of 2012, according to estimates of analysts of high-street bank Ceska sporitelna.

Our take:
We feel that this is on the conservative side. Lock in your mortgages if you have the chance and don’t plan to sell for 5 years.

1. Unemployment in ČR grows to 7.3% in Q4
(http://praguemonitor.com/2010/02/08/unemployment-%C4%8Dr-grows-73-q4)

High-level overview of article:
Unemployment in the Czech Republic grew by 2.9 percentage points year-on-year to 7.3 percent in the last quarter of 2009, and against the previous quarter was 0.3 points higher, the Czech Statistical Office (CSU) announced Friday.

Our take:
We believe unemployment will be a significant factor this year for investment property. See our 2010 Czech Property Forecast second subheading: /www.czechpoint101.com/newsletter/?p=606


2. Czech Foreign trade ends in record surplus in 2009
(http://praguemonitor.com/2010/02/09/foreign-trade-ends-record-surplus-2009)

High-level overview of article:
The Czech Republic’s foreign trade ended with a record Kc153.2bn surplus last year, Kc85.9bn higher than in 2008, the Czech Statistical Office (CSU) announced Monday.

Our take:
This data should give a boost to business sentiment although, as the article points out, the full effect of a reduction in public spending such as the car scrapping programs, needs to be seen in 2010.


3. Czech economy falls by 4.3 pct in 2009 – CSU
(http://www.financninoviny.cz/english/zpravy/czech-economy-falls-by-4-3-pct-in-2009-csu/434355)

High-level overview of article:
Czech gross domestic product (GDP) adjusted for price, seasonal and calendar influences dropped by 4.3 percent year-on-year in 2009. according to preliminary data released by the Czech Statistical Office (CSU) Feb. 12, 2010.

Our take:
Although down a little more than expected, it is the second strongest in the region behind Poland, which has a much stronger internal market.


4. Bank fees in Czech Republic highest in Central Europe
(http://www.financninoviny.cz/english/zpravy/bank-fees-in-czechrep-highest-in-central-europe-press/436583)

High-level overview of article:
Czech bank fees are the highest in Central Europe, the daily Lidove noviny (LN) said today referring to data from the Czech National Bank (CNB) and statements by bank fee experts.

Our take:
We don’t need anyone to tell us this! Our recommendations for bank accounts for personal: www.mbanka.cz or www.rb.cz and for SROs: www.fio.cz.


5. Mortgages get more expensive
(http://www.cbw.cz/article/mortgages-get-more-expensive.aspx)

High-level overview of article:
The era of cheap mortgages is drawing to a close. Potential home buyers are advised to secure a loan in the first half of this year.

Our take:
Fixing has historically rarely been to the benefit of home owners but the time period we are in now, with potentially strong inflation on the horizon, we feel this is a good idea.

1. Czech households hold best financial position in region
(http://praguemonitor.com/2010/01/25/net-financial-position-czech-households-best-region)

High-level overview of article:
The Czech Republic ranks first in the region in terms of net financial position of households that improved last year making up over 42 percent of GDP, says a study of UniCredit Bank.

Our take:
This is a big reason in why housing prices did not take a huge dive. There were not distressed sales of property forcing prices down as Czech households have good balance sheets and can withstand some economic turbulence.


2. Confidence in Czech economy up 2.2 pts in Jan –CSU
(http://www.financninoviny.cz/english/zpravy/confidence-in-czech-economy-up-2-2-pts-in-jan-csu/425362)

High-level overview of article:
Confidence in domestic economy increased again month-on-month in January owing, however, only to an increase in confidence of entrepreneurs, and the composite confidence indicator grew by 2.2 points, the Czech Statistical Office (CSU) announced today.

Our take:
Substantial growth over January 2009!


3. Czech banks grant 33 pct less in mortgages in 2009
(http://www.financninoviny.cz/english/zpravy/czech-banks-grant-33-pct-less-in-mortgages-in-2009/425679)

High-level overview of article:
Czech banks granted loans for housing worth about Kc66bn to citizens in 2009, down by 33 percent from nearly Kc114m in 2008, the Local Development Ministry said today.

Our take:
Chart at the bottom of the article with years in terms of volume is very interesting. 2007 was a huge year and property prices jumped in sync.


4. Czech Finance Ministry Plans to Adopt EURO by 2016
(http://www.radio.cz/en/article/124377)

High-level overview of article:
The Czech Finance Ministry has outlined an ambitious plan to meet all the criteria for adopting the common European currency. If all goes well, the euro could replace the Czech crown by 2016. But adopting the euro is evidently no longer a priority for the Czech politicians who will replace the current caretaker cabinet after elections in May.

Our take:
The goalposts on this have moved so many times I don’t think anyone takes the talk seriously anymore. We really don’t feel it should be considered as a major factor in an investment decision.


5. Czech Central Bank May Delay Rate Rises, Tomsik Says
(http://www.businessweek.com/news/2010-01-26/czech-central-bank-may-delay-rate-rises-tomsik-says-update1-.html)

High-level overview of article:
The Czech central bank probably won’t raise interest rates until the third quarter as koruna gains keep a lid on inflation, taking pressure off policy makers to reverse monetary easing, board member Vladimir Tomsik said.

Our take:
Good news for investors but will probably keep CZK currency soft for the majority of the year.


6. Apartment prices fell slightly, however, rents become more expensive
(http://ekonomika.idnes.cz/ceny-bytu-mirne-klesly-najmy-vsak-zdrazuji-fkz-/ekonomika.asp?c=A100126_205935_ekonomika_abr)

High-level overview of article:
Property prices dropped year-over-year and quarter-over-quarter (-1.2%) but not substantially. Real estate agencies report that rents increased in all locations.

Our take:
A little bit more of a drop than we expected for Q4 of 1.2% after a rise in Q3. However, rent increases and demand we can also confirm.

The names of two tenants who have paid their rent on time for the last 3 months are rewarded with two 500 CZK gift cards to IKEA! Good tenants do win… http://www.twitvid.com/63386

1. Analysts: Economy to grow next year
(http://praguemonitor.com/2009/12/29/analysts-economy-grow-1-2-next-year)

High-level overview of article:
Czech economy should return to growth next year, adding one to 2 percent thanks to positive development abroad, according to the latest estimates of analysts polled by CTK.

Our take:
We feel pattern of economic revival predicted will also be the same pattern as demand in the property market. Stronger in the first half and then weakening in the second. Please see our 2010 Czech Property forecast for more information.


2. Confidence in Czech economy higher in Dec
(http://praguemonitor.com/2009/12/29/confidence-czech-economy-higher-dec)

High-level overview of article:
Confidence in the Czech economy rose again in December, adding 2.1 points against November owing to higher confidence of both businesses and consumers, the Czech Statistical Office (CSU) said Monday.

Our take:
Good news but expectations with regard to unemployment might be wrong.


3. Economists: Czech economy likely to stop falling in 2010
(http://praguemonitor.com/2010/01/04/economists-czech-economy-likely-stop-falling-2010)

High-level overview of article:
The Czech economy can possibly stop falling this year which, however, does not apply to all branches and at the same time low inflation, rising unemployment and a very modest pay rise may lead to a drop in real incomes for the first time after many years, some economists have said.

Our take:
Key point is that Czech recovery depends on recovery in Western Europe. Go team go!


4. Czech Republic to be among first countries to raise rates
(http://praguemonitor.com/2010/01/07/%C4%8Dr-be-among-first-countries-raise-rates)

High-level overview of article:
The Czech Republic will be among the first countries in the world to raise interest rates, the server iHNed.cz quoted Czech National Bank (ČNB) Vice-Governor Miroslav Singer Wednesday as saying for Thursday’s issue of the daily Hospodářské noviny.

Our take:
We love his analogy in the article: “When you have a boat that is smaller and more dependent on the external environment, you have to move the rudder more often.” Very true and good prediction of the future. Look for strengthening of the CZK as a result!

We will be drawing from a hat on Monday the names of two tenants who have paid on time for the last 3 months and each will receive a gift. There will be a video posted of the draw.

We will be doing this regularly every three months. Tenants – be sure to get your rent in on time!

“In this world nothing is certain but death and taxes.” – Benjamin Franklin

________________________

Under Czech law, if an individual owner is collecting rent from the rental of a Czech property, they must file a tax return in Czech Republic.

This is also the case for those who own their property through a Czech company or SRO.

In both cases a tax return must be filed even if there was no net profit. Losses can be carried forward to offset income in a future tax year.

There is a double-taxation agreement between Czech Republic and the UK or other EU countries which would prevent you from paying taxes in another country.
________________________

Here are the upcoming tax deadlines for the 2009 tax year:

Property Tax Registration: January 31, 2010
(required for all properties where a new owner was registered in the Land Registry in 2009):

Individual Income Tax: March 31, 2010

Corporate Income Tax: March 31, 2010
(if power-of-attorney has been given to a registered tax advisor such as ours this date is extended to June 30, 2010.)

1. Foreign direct investment is key indicator
(http://www.praguepost.com/business/3165-foreign-direct-investment-is-key-indicator.html)

High-level overview of article:
Analysts optimistic about investment from abroad in new year.

Our take:
We agree that this downturn in the Czech economy will have a positive effect on FDI as will the softening of the CZK currency.


2. Survey reveals optimism for 2010
(http://www.praguepost.com/business/3178-survey-reveals-optimism-for-2010.html)

High-level overview of article:
Czech business executives believe the economy will improve significantly over the next six months, according to a new report on business sentiment in Central and Eastern Europe. Whether such positive thinking is actually capable of boosting sales remains to be seen.

Our take:
When you are at the bottom it can’t get anything but better.

1. ČNB: Banks in ČR raise net profit by 10% in Q1-3
(http://praguemonitor.com/2009/12/03/%C4%8Dnb-banks-%C4%8Dr-raise-net-profit-10-q1-3)

High-level overview of article:
Czech banks generated an aggregate net profit of Kc40.2bn in the first three quarters of this year, a year-on-year growth of almost 9 percent, according to statistics made public on the Internet by the Czech National Bank (CNB) Wednesday.

Our take:
Well, their conservative approach seems to be paying off but we really feel that those lenders who open their doors a little earlier than the big players will make good profits on this time period.


2. Record state deficit sparks fears that Czech finances are spiralling out of control
(http://www.radio.cz/en/article/122772)

High-level overview of article:
Figures just out have confirmed that the Czech state is heading for a record-breaking and massive public deficit this year. Higher spending and a dramatic drop off in revenue from taxes could see a ten-fold jump in the deficit by the end of this year compared with last. Leading analysts are now warning that the debt and deficit powered public finances are heading off the rails.

Our take:
Welcome to the world of ‘developed’ countries. I am not the most authoritative on this but I really don’t know which countries don’t have a massive deficit in this crisis.


3. Apartment rental demand increases
(http://bydleni.idnes.cz/pronajmy-bytu-jsou-hitem-nabidka-je-vetsi-a-stoupaji-i-zisky-majitelu-1kd-/reality_bdp.asp?c=A091130_133223_architektura_web)

High-level overview of article:
Renting apartments is now better than a year ago. There has been a big increase in potential tenants and rental prices have increased.

Our take:
Good news for all current property owners. The timing is also great overall in terms of purchasing additional properties as yields are the highest they have been in three years and interest costs are close to all-time lows. Bad thing is that banks expect high amount of initial capital (minimum of 20%) and buyer must have a good provable income.


4. Czech Housing market gets boost
(http://praguepost.com/business/2988-housing-market-gets-boost.html)

High-level overview of article:
The government has approved a bill to guarantee loans for construction companies or individuals to build rental housing throughout the country in a dual effort to boost the frozen construction industry and tackle a nationwide housing shortage.

Our take:
An good move to keep living costs down for Czech citizens but effects probably will take two to three years to be felt. In the meantime owners with rental properties can expect increasing yields and less vacancy.


5. Analysts: Inflation returns to ČR, unemployment grows in Nov
(http://praguemonitor.com/2009/12/07/analysts-inflation-returns-%C4%8Dr-unemployment-grows-nov)

High-level overview of article:
Consumer prices have started to grow again in the Czech Republic after a fall seen in October, analysts polled by CTK said, putting inflation at 0.4 or 0.5 percent for November, with the biggest price growth seen by fuels.

Our take:
Normally inflation is not something that makes us happy but in the middle of this crisis it is good news!


6. Average wage in ČR grows by CZK 1,068 to CZK 23,350 in Q3
(http://praguemonitor.com/2009/12/07/average-wage-%C4%8Dr-grows-czk-1068-czk-23350-q3)

High-level overview of article:
The average monthly wage in the Czech Republic grew by 4.8 percent, or Kc1,068, year-on-year to Kc23,350 in the third quarter of 2009, the Czech Statistical Office (CSU) said Friday.

Our take:
Earning power continues to increase and this is good news for the strength of the resale property market.


7. Czech economy shows signs of recovery
(http://www.ft.com/cms/s/0/9c4ad4f6-e4b5-11de-96a2-00144feab49a.html)

High-level overview of article:
The Czech Republic is showing signs of recovering from the economic crisis, with third quarter gross domestic product growing by 0.8 per cent, helped by a revival in exports, according to data from the Czech statistical office released on Wednesday.

Our take:
Good news!

1. ČSÚ: Confidence in Czech economy up in November
(http://praguemonitor.com/2009/11/26/%C4%8Ds%C3%BA-confidence-czech-economy-november)

High-level overview of article:
Confidence in the Czech economy increased in November, the composite confidence indicator rising by 3.1 points compared with the previous month, the Czech Statistical Office (CSU) said yesterday.

Our take:
We would expect this to continue to rise.

2. Poland, Czech Republic and Slovakia to be best performing economies of the eastern EU for next few years
(http://www.google.com/hostednews/afp/article/ALeqM5hDj1Giv2Ud1vmICvcpytfFX31a3w)

High-level overview of article:
The European Union may have inched out of its sharpest recession since the global slump of the 1930s, but green shoots are not emerging uniformly across the 27-nation bloc’s eastern member states.

Our take:
It is difficult for many not to lump all of Eastern Europe together. It will take some time but we are starting to see the differentiation clarifying.

3. Eurozone emerges from recession!
(http://news.bbc.co.uk/2/hi/business/8358227.stm)

High-level overview of article:
The eurozone economy has emerged from recession after growing between July and September, figures have shown.

Our take:
Yahhhh! It’s official. Will take a few months to hit Czech Republic as it is farther down the supply chain but it is coming.