Czech Republic Property News Wrap-up :: Week of August 17 to 21, 2009

Czech Point 101 July 22, 2014 @ 2:48PM

1. Janota: Czech euro adoption in 2014 or 2015 not realistic

High-level overview of article:
Adoption of the euro by the Czech Republic in 2014 or 2015 is not realistic in the current economic situation, Finance Minister Eduard Janota said on Czech Television Sunday. The country has not disclosed the official date for its entry into the eurozone.

Our take:
Czech Republic rather seems like a child trying to get hold of a soccer ball but keeps accidentally kicking it out of reach. More and more it seems that the EURO adoption date is getting moved off and should become less and less of a consideration in the purchase of Czech property.

2. Construction of new flats in ČR down by a fifth in Q2čr-down-fifth-q2)

High-level overview of article:
Construction of 9,736 new flats started in the Czech Republic in Q2, a decrease of 21.2 percent year-on-year, the Czech Statistical Office (CSU) said Wednesday.

Our take:
A major part of this due to severely restricted lending on the part of Czech banks but also through general pessimism toward the Czech property market in the short-term. To the end of 2007 and into 2008 there was overbuilding. However, at this rate of decrease we expect that the end of 2010 and into 2011 there could very well be a housing shortage which would push the prices upwards again. Those developers who time projects to come online at the right time will do well.

3. Czech Central Banker: No Debate on Raising Interest Rates

High-level overview of article:
Macroeconomic conditions in the Czech Republic and around the world do not allow a discussion yet on tightening monetary policy, Czech central banker Pavel Rezabek said in remarks published on Thursday.

Our take:
Czech Republic, to criticism from many, have not engaged in huge economic stimulus programs. Since it is an exporting country and further down any inflation chain we feel it should be able to better control inflation than consumer nations. We don’t expect any interest rate increases this year and probably to middle of 2010.

Updated/Aktualizováno: ,

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