Despite being built in the communist-era, panel-house flats in the Czech Republic are becoming increasingly popular among investors, according to market reports.

Often much cheaper than newly-constructed properties, these apartments - found in most major cities in the Czech Republic - are expected to increase in value by ten per cent over the course of 2007, the Prague Monitor cited a report by Hospodarske Noviny (HN) as saying.

Pavel Kuhn of Ceska Sporitelna told HN: "There's a great deal of interest in older housing, mostly because it's much more affordable than modern housing."

With the Czech Republic set to receive a significant boost in investment from the EU to help improve its existing housing stock by 2013, the necessary refurbishment of panel-house apartments and their surrounding areas may go ahead, making the properties increasingly attractive to investors.

The government is expected to invest a significant amount as part of a modernisation programme aimed at improving such apartments – which currently account for a third of the country's overall housing stock.

Demand for properties in the country led to construction output growing by 15.4 per cent in 2006, according to a recent report by the Czech Statistical Office.

The agency found that the suburban areas of large cities, such as Prague, were the most popular locations for the development of new apartments, as changes to the mortgage market and greater support for first-time buyers provided many people with greater access to the market.