For investors in CPP, you might have heard rumours recently of the developer's possible demise of which I've heard from my various sources in Prague. I spoke with Tony Seddon from Seddons solicitor, my conveyancer, early last week re this and he was meeting the developer lmid week. Milan Ganik, MD of the developer, has subsequently sent the following letter via email on Thursday. This might have only been sent to Phase 1 clients, I'm not sure.

I'm in Phase 1 of CPP and completion is now due by year end/early 2009. Importantly, they're saying they are financed through to completion - we'll wait and see. Monies are held in escrow so there is a certain level of protection.

Will keep the PS forum updated on any further news in due course.
Regards
Dom

Dear Dom

I am assuming that you have bought you Central Park unit via other sources and not through PS.

Please be aware that the PS units are in a different phase than you unit and also those clients who are i-PA clients have been fully updated on the delay of their units.

Kindest regards
Debbie

Dom,

The units in block A and B1 (these were the PS units) will now be completed in April. This has a knock-on effect for the mortgage and costs, which is not good.

Deborah - On the mortgages, I am yet to hear back from you as to the state of the Czech mortgage market. I'm a bit concerned on recent developments, big rises in loan rates, and wonder if you can advise on where things are heading, in your opinion?

Hi John

We sent an update out to all Czech buyers just over a week ago. If you have invested in Czech through PS you should have received it?

Here's is what it said:

"We have been informed today by our Czech finance partners of important changes in the country's mortgage market - changes that will affect you as an investor.

The overall message is that maximum LTVs are falling, with GE Money Bank and Raiffeisen Bank reducing theirs to 75% already. In addition, the maximum loan amounts have been capped to between 5 and 8 million CZK.

A number of other requirements have also been tightened up and it is unclear as to what is going to happen next in this market. There is understandable concern that other lenders may follow this course of action over the next few days and weeks.

Our partners have suggested that if you require a mortgage for outstanding payments on any of your Czech investments then to apply as soon as possible, as once an application is filed any new provisions cannot be applied."

Sent: 23/10/08

You can request a quote for your mortgage requirements directly from all three of our Czech finance partners via our simple quotation request form on the Property Secrets website. This will also get your application process started with your preferred broker.

http: / /www .propertysecrets .net /mortgage -quote .html

Thanks Ben. In light of this, what's your opinion on the potential for property appreciation when LTV are falling and loan rates are rising?

I'm concerned as I'm completing in April on Central Park and I'm wondering if I'll be left with something worth less than price paid.......

From today's news-

Top mortgage provider ups rates

Hypoteční banka, the largest Czech
mortgage provider, is today increasing
interest rates by 0.2 to more than
0.5 percentage points, depending on
the type of mortgage. The move follows
similar measures by four other
Czech banks. [ Týden.cz ]

I doubt very much you'll have something worth less than the price paid, especially with this development. And if you look long term then I think you'll find you make money on it.

I think in the Czech Republic (Prague especially) you're likely to see a slowing of growth rather than any falls. Just my opinion.

If you're only looking at completion and whether you could sell for a profit then, then I don't know. More a question for i-PA that.

The recent mortgage events will have an effect and the market is slowing down (as it is globally). The point that I would like to add is that in the global environment Czech, Slovakia, Bulgaria and Romania are in a strong position to fair better than many other countries and the mortgage impact will drive a rental boom.

Therefore units completing over the next 6 months will be in high demand, locals will shy away from investing in off plan and will want recently completed units to buy or rent.

This is good news for investors that have followed the advice given by PS over the last 3+years.

Let's hope that those PS investors who took a gamble on Jucu in Cluj (based on PS advice) will be in a position to take advantage of the rental boom

we have a property in central park we were told it would be ready April and now told it will be the end of the year. Has anyone in the 1st1 phase been told this. We are concerned about the total finance of this development as it has been a long time, the completion is rummered to take another 5 years anyone heard something else. The rental market is also supposed to be difficult due to the site condition. Any news from others not sure what to do