Construction output set to rise 25% in 2007 according to European Focus report

The Czech economy is booming, driven by a growing housing market, high levels of foreign investment in the commercial sector, and increased funding for infrastructure, according to the latest European Focus report by EC Harris.

The consultant’s manager in the region Pavel Cermák said the country was undergoing the greatest boom in the construction of flats and housing since 1989.

He added: “Demand for offices is being boosted by an ever-growing number of new real estate investors and investment funds who are looking to invest in the country.”

Construction output, which saw an increase of 6% last year, is forecast to show a further rise of over 25% in 2007.

According to the report, Prague and the bigger Czech cities are leading the current boom in construction of residential housing. Demand has been driven by demographic conditions, increased living standards, low mortgage rates, and expected changes of VAT.

The economy saw strong growth in 2006 as GDP grew by 6.1% driven mainly by customer consumption with a further rise of 5.6% expected during 2007.