In a real estate market dominated by foreign developers, Central Group is a bit of a rarity. During its 11-year existence, the Czech-owned company quickly became the biggest local residential development firm.

The man responsible for all of this is Dušan Kunovský, the company's founder and general director. He ascribes the company's growth to its wide selection of properties and services. "Our aim is to cover as broad a spectrum of the market as possible," he says.

In the firm's downstairs lobby, a flat television screen above the reception desk runs non-stop Central Group ads. In one, the camera zooms in on a digital visualization of a newly built house, then sweeps through the front door and into a brightly colored, spacious living room, where a smiling family is spending quality time together over a board game. Below the screen sit three receptionists, sporting nearly identical highlighted blond hairstyles and frosted lipstick smiles.

Upstairs — which is to say, 19 flights up the glass-and-steel tower that formerly housed Motokov — Kunovský sits in an electric-blue chair in a conference room overlooking Prague. If the sky were clearer, you could probably see beyond the city limits and maybe even spot some of the firm's projects. Currently, Central Group has 16 apartment building locations, 10 family house developments and four lots. Most of them are near Prague.

"We know the Prague market, and it knows us," says Kunovský. The company is not planning any major expansion into the regional cities just yet because, as Kunovský notes, Prague continues to pull much of the demand. He isn't ruling out starting projects further afield in the future, though.

Central Group markets itself as an everyman's firm. The core of its customers are looking for mid-range housing, but Kunovský notes that clients from all segments of the market spectrum are becoming much more demanding. "What was sufficient several years ago isn't necessarily sufficient today," he says. "The market has matured. Also, people are traveling more and they're aware of all the latest trends."

Since the company's inception, the market has changed a great deal, according to Kunovský. "In the beginning, there was great hunger for small apartments," he says. "Now, people tend to look for something slightly bigger."

In response to this trend, Central Group is shifting some of its focus to high-end housing. One of the firm's newest projects, for instance, is a series of functionalist-style villas in Nebušice, Prague 6. The spacious houses, on lots that range from around 700 to 1,100 square meters, are far removed from the typical suburban row house, selling for just under 13 million Kč.

But the majority of Central Group's projects focus on more affordable housing. A studio apartment in the firm's new development in Zahradní město, Prague 10, for example, will sell for just under 1 million Kč.

"I think the key to the success of our company is that we went step by step," says Kunovský. "We didn't take out huge loans. And over the years the company has become stable."

Kunovský also notes that since Central Group is a 100 percent Czech-owned company, whatever profit the firm makes doesn't leave the country. Instead, it's invested into other new developments in the Czech Republic.

The initial investment Kunovský made when he started the company in 1994 was 100,000 Kč. Since then, the number of people employed by the firm has grown from two to more than 200.

Perhaps the one development on the local real estate market that's had the biggest impact on Kunovský's firm during the last decade is the changing attitude toward loans. "Not too long ago, 'mortgage' almost used to be a rude word," says Kunovský. The primary reasons people are no longer afraid to take out big loans are the favorable mortgage rates and the healthy Czech economy, according to Kunovský. "About 70 percent of our clients take out loans," he notes. "Average mortgage rates today are slightly above 3 percent, which is phenomenal."

According to recent reports, in the second quarter of this year the Czech Republic's gross domestic product (GDP) growth was 5.1 percent, the biggest level of growth since 1996. This growth isn't primarily fueled by consumer demand, according to economists, but rather by exports, which means that it shouldn't have a negative effect on the stability of the Czech crown or on the interest rates. Combined with the steadily rising property prices, this positive economic prognosis means many people are looking at real estate as a profitable investment, according to Kunovský.

What could potentially slow down the growth of the residential real estate market are the planned VAT (value added tax) changes, especially if the rates climb from the current 5 percent to 19 percent, says Kunovský. At the moment though, he says the expected VAT increase is actually helping fuel growth, since many people are rushing to purchase property before the changes go into effect at the end of 2007.