The Czech Republic's construction sector has experienced significant growth during 2006, buoyed by ever-increasing interest in the country's property market.

Construction output grew by 15.4 per cent between the end of 2005 and December last year, with 11,441 building permits granted by authorities, the Czech Statistical Office reported.

And the estimated value of these constructions increased by nearly 50 per cent to CZK 34.7 billion (£891.8 million).

The residential building sector also grew by more than eight per cent during 2006, with production starting on nearly 44,000 properties.

According to the Czech Statistical Office, this growth in the residential market was boosted by improvements in the home financing sector as well as various government initiatives.

It said the "continuing favourable situation in the mortgage market" as well as year-on-year increases in housing loans have contributed to more homes also being built.

The Czech government has also added to the growth in the construction sector, according to the office, with more young married couples receiving state support to help them become first-time buyers.

Suburbs of large cities were found to be the most popular location for construction of new homes and apartments, with the central Bohemian region and Prague leading the way.

The Czech Republic has been a firm favourite among holidaymakers over the last decade, with people flocking to the capital city of Prague in particular to take in the city's impressive architecture, friendly locals and cheap food and drink.

And its popularity as a tourism destination is showing no signs of letting up, with the Czech tourism agency predicting that up to 6.7 million people will visit the country over the next year.

This should come as good news to property investors in the Czech Republic, as higher tourism levels mean an increased demand for holiday accommodation.