Pre launch investment opportunity : Luxury Villas Poland

Pre launch investment opportunity:
Mountain & Lake Retreat in Krakow Poland

The Dates for you Diary Are 5th , 6th, 7th August

Churchill Properties have recently announced details on a brand new mountain and lake retreat development. The development offers excellent skiing and sailing opportunities near by. Only 29 of these luxury villas are available with prices stating at 153,000 TBC.

Interested parties are invited to the Czorsztyn Lake Regatta!
Experience the beauty of “Osada Czorsztyn” natural surroundings! “Osada Czorsztyn” is going to be the most exclusive recreational housing development in the area, its design combining the traditional and futuristic elements. We hereby offer you an opportunity to appreciate this project - take part in Czorsztyn Regatta, spend a weekend exploring the wonders of Czorsztyn region.

Departure is from Cracow to the investment site. This is followed by a meeting at investment the site, an on site inspection of area, meeting with the party responsible for the investment.
We travel then by water tram to the historical “Osada” (Settlement) building and meet in the conference hall for a multimedia presentation of the investment. A discussion panel will follow.
Crossing over to the opposite bank of the lake by boat, we visit the ruins of the Castle in Czorsztyn. Free accommodation is available for investors in the castle of Nidzica, including a
traditional meal. Folk music concert on the “Biala Dama” boat is followed by drawing of lots and announcing regatta pairs. Main prize: L10,000 discount on purchase of any “Osada Czorsztyn” house. Return to castle, free time, and integration party in caf on the dam.

Contact Churchill Overseas to reserve your place and to take advantage of this exciting prelaunch investment opportunity. Telephone +44(0) 1983 550400 or email Churchill Overseas info@churchilloverseas.com>

Regulated Rents in Post Communist Countries

From the most recent issue of the Czechpoint101.com newsletter by Nathan Brown

Regulated Rent

Regulated rent is a real issue in the post-communist countries of Central and Eastern Europe. Its purpose has been to keep accommodation affordable for all citizens but there are problems that are arising.

Under regulated rent, a tenant is only obligated to pay a fixed fee for the rent and this rate is not controlled by the actual owner of the apartment or block of flats. It can only be passed on through immediate family members and applies to that particular apartment only. The tenant cannot move to a bigger flat and still enjoy rent control unless they do this through the underground regulated rent swapping market.

Currently it is estimated that there are about 750 000 flats under rent control in the Czech Republic. This is almost fully one-fifth of occupied flats. Around 300 000 are privately owned and the rest are owned by towns or villages.

An example of how this affects landlords recently came to light with a client from the US who is partial owner in a block of flats in Prague. She is an absentee co-owner and asked us to help advise her on matters pertaining to her property. She has a tenant who enjoys regulated rent in a 1 + 1 (studio) flat in the building. This tenant pays a mere 1 800 CZK/month when the actual market value is at least 10 000 CZK/month. She had been approached by the tenant offering to be bought out for 400 000 CZK so that she could move the apartment into the free market. This is a common approach to getting apartments into the free market but is quite costly as you can see. For this owner however, there are two options. One is to take the payout. With this decision she will get payback within 5 years considering rental rate increases and the added value that her property has. The other would be to wait for legislation to move the apartment into the free market. Why is this an option?

Recent filings at the European Court of Human Rights in Stasbourg have shown that owners are not happy with the situation and the governments are going to be forced to revise their laws sooner rather than later. One complaint, lodged by the Association of Homeowners (OSMD), involved a filing for compensation for the losses caused by rent regulation in the 16 years since the fall of communism. As reported in Czech Business Weekly, Libor Dellin, deputy chairman of OSMD said that when the court decides in favor of the property owners, each of them will require a minimum compensation of 10 000 EURO (340 000 CZK). Another homeowners association, the Movement for the Protection of Property Owners (HOMR), has filed a similar complaint, hoping to be awarded compensation from the state of up to 1.7 billion EURO (50 billion CZK).

Why do they feel so confidently about their cases?

The Strasbourg court recently ruled in favor of a Polish landlord who had accused the government of violating her human rights by maintaining rent controls. The court ruled that the government’s action of regulating rents at the expense of property owners was illegal and against human rights.

How have these developments and others affected the regulated rent market in the Czech Republic?

A recent bill proposed by the Ministry for Regional Developments (MMR) on June 14th suggests a gradual rent deregulation beginning in October 2006.

The Minister of Regional Development, Radko Martinek, has proposed that rents should, on an average, grow by 9.3% annually to within 5% of the market value. He is suggesting this increase should take place from October 2006 until 2012. Rents would increase most in Prague and Brno but would not grow at all in some areas like Zlin.

Will all of these changes come to pass? There is strong lobbying on both sides of the issue and time will tell. Many are taking the opportunity to gamble on the chance that these changes will come sooner rather than later and are buying regulated rent apartments at the current below market values.

We will strive to keep you informed of any further developments in this area that would affect investment in the Czech Republic.

Foreigners Ever Keener to Buy Property in Slovenia

EU citizens are increasingly interested in buying real estate in Slovenia after restrictions were lifted following EU entry nearly one year ago. Some 500 properties have been sold in the first year, according to the Tax Administration, mostly at the seaside and in the northeastern region of Pomurje.

The Ministry of Justice does not think the figures are alarming and said there is no need to invoke the safety clause to protect the property market. Sales will level gradually and the opening of the property market will probably not have a negative impact on supply of real estate for Slovenian citizens, the ministry has said.

Real estate agents, meanwhile, stress that most buyers come from Great Britain, Italy, Germany, Austria, Ireland and Spain, although most purchases are done privately, not through agents.

While buyers who opt for the plains of Prekmurje most commonly buy houses (old buildings can be had for as little as SIT 5m (EUR 21,000), those buying at the seaside tend to opt for apartments and condos.

British buyers are at the top of the list in both regions, which real estate agents says is probably the results of cheap flights from London to Ljubljana. Agents from the Primorska region have also said that Britons who buy property tend to be working class, while Austrian and German buyers come from the upper and middle classes.

The Gorenjska region is also exceedingly popular, and although only ten percent of all properties sold to foreigners are in the region, agents say that foreigners, especially Britons and the Irish, buy up 70 percent of all real estate on the market. The ski resort Kranjska Gora is the most popular location, followed by the picturesque lakeside resorts of Bled and Bohinj.
According to the property agents, foreigners come here to buy houses, but when they see that prices are much higher than in Poland or Slovakia they typically opt for condos or apartments instead.

Prices have so far been rising due to the ongoing development of the resorts, by 10 to 30 percent. But the agents expect that the raising demand will push up prices even further.

Slovenia is one of the few EU members that have fully liberalised their real estate market for EU citizens following EU entry. The country has negotiated the option of invoking special safeguarding measures in case of excessive demand that would push up prices, but this looks unlikely to happen at this point.

The Read Deal on Buying Property in the Czech Republic

For those who want a real insiders view on the reality of buying property in the Czech Republic, check out Czechpoint101.com. The information on this website is alarmingly honest, revealing quite frankly the risks of investing in property in a former communist country, still trying to overcome a culture of fraud, mistrust and extremely bad business ethics …

Though many agents working in the Eastern European property market may experience a similar culture, very few choose to discuss it on thier website. Czechpoint101, owned and managed by Nathan Brown, provides extremely high quality information on the property market in Brno and Prague and also has some excellent reading material available to download.

For more details on buying property in Brno or Prague … Czechpoint101.com