In Business News this week: Prague is the most popular location for house buyers, an independent audit declares the new road-toll system a success, the government is to sell a significant stake in the CEZ energy giant, and Czechs will buy more laptop than desktop computers for the first time ever this year.
In Business News: the European Commission warns that the aging population will have a considerable impact on Czech GDP growth; the anti-monopoly office hands down the highest ever fine to a state body, after the Labour Ministry awards a contract without a tender; Czech mortgage and home-building savings loans increase ten times in seven years; sales of second-hand cars rise by over 20 percent; and the diplomats may be at loggerheads but trade between the Czech Republic and Cuba rises considerably.
In Business News: the number of applicants per job stands at 5.2, the lowest figure for eight years; the country's biggest steelworks is to let 1,000 workers go, with more redundancies likely to follow; domestic car-production was up a phenomenal 85 percent year-on-year in the first quarter of 2006; the average size of apartments which received planning permission in May was a full 25 percent bigger than the year before; and Czech bookmakers report June was their best month ever, thanks to the World Cup.
Members of the Association for Property Owners have revealed they are planning to sue the Czech Republic for hundreds of millions of crowns in "moral damages" at the European Court of Human Rights in Strasbourg. The association is citing contention with the country's policy of regulated rent. Incoming prime minister and - until now - Minister for Local Development Jiri Paroubek has admitted the association could win its case if the state were doing nothing to improve the situation. However, he indicated the government has been preparing new legislation. The legislation proposes the country entering full deregulation in six to eight years' time.
The percentage of people living in high rise flats in former Eastern Bloc countries such as the Czech Republic is twice as high as in the 15 "old" European Union states. Indeed a full 40 percent of Czechs live in prefabricated flats, known as panelaks, many of which are in bad repair and in need of major investment. The future of high rise flats was the theme of a Prague meeting of EU housing ministers, hosted by the Czech Republic's regional development minister, Jiri Paroubek. He spoke to me at the close of the conference on Tuesday.
The Czech economy - at least in comparison with most of Western Europe - is booming, with four percent annual growth for 2004 - its fastest rate for eight years. This has been accompanied by a boom in the building industry. According figures published by the Czech Statistical Office more than 32,000 apartments were completed last year. This is highest figure in the country's short history since Czechoslovakia split twelve years ago. I talked to economist David Marek from the Czech investment bank Patria Finance and asked him what he believed had
All governments in the Czech Republic since the fall of communism have been cautious over reforming the country's system of state controlled rents, afraid of the impact on the less well-off. Landlords on the other hand, have been increasingly vociferous in their complaints that the low rents collected from their tenants cannot cover maintenance costs. Now a lawsuit that Czech landlords are planning to file with The European Court of Human Rights may speed up the process of rent deregulation.
In many parts of Western Europe, local authorities have privatized public sector housing over the past few years. Now the Czech Republic is following suit, and many local authorities are offering their tenants the chance to buy their flats. Given the legacy of communism, this is a complicated process, and not everyone is benefiting from the changes. One Prague district has chosen an unusual way of dealing with the problem - with its very own lottery.
The number of poor people and rent dodgers has been growing rapidly in some areas in north Bohemia. The reason - availability of extremely cheap housing. Property owners from around the country have found a cheap and simple way of getting rid of problematic tenants. At the same time, it is a solution for poor families who can no longer afford to pay high rents in Prague and other big cities. Local authorities have expressed concern about the development and are seeking ways to fight it.