Economic Indicators

Wages

Average size of flat in m²

• Prices for flats in Prague grew by 16,4% on average, with some key neighborhoods showing growth closer to 30 %.

• The city with the highest price growth in the country was Ostrava, where the average price per square meter lift exceeded 50% for the year.

• The number of housing units completed was 41.650, 38 % more than in 2006, but still bellow the government’s current estimation which states 55,000 units are needed yearly to satisfy demand. Approximately 43,000 dwellings were started in 2007.

• The Czech Republic has the seventeenth highest GDP per head in EU with 81,4 % of the EU27 average. During the last ten years the GDP per head has grown by 90 %.

• For years 2000-2007 the real Koruna rate had risen annually by 3% which corresponds with the rise of Czech productivity. Last year the koruna appreciated by 10% against the Euro, the most significant appreciation in CEE.

• In February of 2008, the Koruna set a new record, the exchange rate against the Euro appreciated just under 25 Koruna and against the US Dollar just under 17 Koruna . In 2008, it is estimated that the Koruna will depreciated slightly to 26 CZK/1 EUR and remain at this level. According to the Czech National Bank (CNB) this price growth is an irregularity and inflation should be around the target level of 3 % during 2009. The CNB forecast predicts the inflation rate 7 will decline by the end of year 2008 to 5,3 % and in the first half of 2009 to 2,4 %.

• The gross nominal monthly wage in 2007 was CZK 21,692 (EUR 867) and it is expected to rise in 2008 by approximately 8 % and 2009 by 7,4 %.

• The unemployment rate in 2007 reached its lowest level since 1997 as it moved from 7,1 % in 2006 to 5,3 % and therefore declined by nearly 2 % during the year. The ministry of finance expects the unemployment rate will decrease in 2008 to 4,4 % and in 2009 to 4,1 %.

• According to the ministry for local development there were 77.915 mortgages closed in 2007, which is nearly a 24 % YOY uplift. As of 31st of December 2007 there were 170.971 dwellings under construction, 11.3% less than 2006. The Czech Government estimates that there is a shortfall in supply of approximately 55,000 flats which need to be completed yearly until 2012.

• More than 1.2 million flats representing more than a third of the overall housing supply in Czech Republic are a part of the communist style high–rise housing stock. Estimates for renovation of these buildings, because of insufficient repairs as well as construction defects, stand at around KČ 500 billion (€18 billion).

• Rents regulated by the government are connected with approximately 760,000 flats – that is more than a fifth of the whole housing stock. From January 1st 2007, a law was implemented controlling the gradual rise of regulated rents.

• Despite the 1 % increase to the base rate in 2007, it was very a favourable year for  mortgage lending and there were 77,915 mortgages signed worth of 147,630 million CZK which represents a 28% uplift.