Investing in the Czech Republic - Outside of Prague - Part 3:
Ostrava Property
In the North American school system students seeking to be the
best strive for an 'A' grade. However, the school system is not
the end of the drive to be the best and earn an 'A' grade.
Letter grades are used by rating agencies to rank communities in
terms of investment risk.
Ostrava, in recent times, received an 'A3' grade from Moody's
Investors Service.
What does this mean to you as a potential investor? What are
the other indicators which would point to the health and
prospects of Ostrava's property market?
What does this rating actually mean?
There are 25 rankings from Moodys in the investor services, an
'A3' is seventh from the top and is defined as an upper-medium
grade. A similar grading company, Standard and Poors, also gave
Ostrava an 'A' ranking based on their grading system.
What will that mean for the city?
Some investors will only look at cities with 'A' ratings. It is
an indicator of the financial and fiscal health of the community.
Since the restructuring of the industry in the 1990s, the
economic platform of the city has changed substantially. In
fact, most of its incomes are no longer dependant on local
economic conditions.
Ostrava, in receiving this rating, achieved the identical level
of rating as other mid-sized cities in Central Europe. Brno, for
example, also received an 'A3' rating (for a complete discussion
of Brno property and economic developments visit our feature on
Brno property.)
Let's go through some other indicators as to the investment
potential for this Northern Moravian city.
Area: 214 km2
Population (latest data April, 2004): 315 000
Road Distance from important European and Czech cities:
City / kms Brno / 170
Olomouc / 93
Prague / 360
Vienna / 310 Bratislava / 300 Warsaw / 300
Budapest / 389 Berlin / 540
Paris / 1 500
With the completion of the D-47 highway the infrastructure
capacity will greatly increase as well as the ease of travel.
Travel time to the Czech capital, Prague, will be shortened to a
little over three hours.
Air Transportation:
Ostrava - Mosnov International Airport is located 25 km from
the city centre. It is the biggest regional airport in the Czech
Republic with a capacity of more than one million passengers per
year (current actual figures are just over 200 000 per year and
expected to triple next year) and a runway 3500m in length and
63m wide, allowing it to accommodate the world's largest
airplanes. Currently it caters to both domestic and
international flights.
Although there are currently not any well-known low cost
carriers flying into Ostrava we expect it will only be a matter
of time.
Average monthly salary for Ostrava region (2004): 18 966 CZK
Average monthly salary for Czech Republic (2004): 18 582 CZK
Average monthly salary for Czech Republic (2005 2nd Q): 18 763
CZK
Education: 16.3% of residents in Ostrava have University level
education compared to 9.4% Czech wide.
Average temperature in January: - 2