UniCredit, the Italian banking giant, is one of the most active financial groups across all CEE markets and the standard of its research and access to data is excellent.

So, when it produces an assessment of a market, it's always worth taking note.
It's recent report focusing on the competitiveness of the Czech Republic should be a mandatory read for all property investors as it really highlights just what strengths this market has.

This is from the exec summary of the lengthy report - it sums things up pretty well:

"Thanks to its favourable economic and business environment, the Czech Republic ranks among the best countries in the CEE region in terms of attractiveness for foreign investors.

"The country places among the first 30 to 40 economies in the world in terms of "ease of doing business", level of corruption and global competitiveness. Indeed, after Estonia, it attracted the largest amount of per capita FDI in the CEE region in the last decade.

"The main investors came from Western European countries benefiting also from the Czech Republic's strategic geographic position in the middle of Europe.

"With a well established industrial tradition, the Czech Republic has increasingly specialised in mid-high technology sectors, such as automotive, machinery and equipment manufacturing, electrical and optical equipment and fabricated metal products.

"Due to its proximity to or being a part of some important industrial districts in Central Europe, the country still shows increasing growth potential for those higher value added industries despite gradually losing its competitive advantage as a low labour cost production base.

"The Czechs' increasing income and standard of living, as well as the development of mid-high technology industries, drive the expansion of services, such as wholesale and retail trade, financial and consulting services, business, real estate, transportation and logistic services, etc.

"In order to remain competitive at the international level, the Czech Republic has to preserve and somehow enhance its already high attractiveness for foreign investors.

"Thus, leveraging on the education and training of young people as well as encouraging investments in technology and R&D are all activities to be promoted in order to move toward high quality production, improve efficiency and labour productivity in the production process.

"The economic outlook is positive. GDP has been growing by more than or around 6% yoy for the third year in a row and an expansion, to around 4-5% is still expected for the years to come.

"On the production side, the economy is bene fiting from fast expanding capacities in manufacturing. On the demand side, gross capital formation and private consumption have lately replaced net exports as the key driver for GDP growth.

"The extended spell of the GDP fast track, which is deemed to be above potential, has put a strain on the labour market.

"Unemployment has been continuously falling, along with employment increasing by 1% annually through the foreign workforce being absorbed.

"While the growing presence of immigrants managed to curb wage demands in previous years, signs of wage growth acceleration have started to be observed.

"Good economic performance and relatively firm balance of payments data helped maintain average real appreciation of the Czech currency in excess of 2.5% annually over the last ten years.

"A low inflation environment translated into a similar pace of CZK nominal appreciation versus major currencies.

"Looking ahead, we believe in a gradual, albeit milder real appreciation pattern of the Czech Koruna for the next years, on the back of sound economic development.

"With the CZK appreciation maintaining rather tight monetary conditions, nominal interest rates have been kept and continue to be low and only converging toward the ECB level from the downside.

"While the recently approved economic reform may act as a boost for new FDI envisaging among other things, a cut in the corporate income tax from 24% in 2007 to 21%, 20% and 19% respectively in 2008, 2009 and 2010 - no EMU entry data has been set yet."

Anyone looking for a property market can't really expect to find one based on better fundamentals this this - surely!