Development in Bratislava (source: Archive of Sme)
In the Slovak capital, an investment into the purchase of a flat and subsequent return takes 26 years.
While Bratislava is the European average when ranking the payback period of an investment flat, Prague and Vienna are at the tail-end of the ranking.
Dubrovnik at the end of the ranking
The analysis of the European brokerage company ProfitLevel showed that the payback period in Prague is 10 years longer than in Bratislava.
Analysts compared the market prices of flats and rents in 17 European capitals and holiday destinations, the TASR newswire reported.
Dubrovnik in Croatia occupied the last position, where the payback period of an investment flat for rent is more than 42 years. The second-longest period is in Munich (38 years), Vienna (37 years) and Prague (35.5 years).
On the other hand, an investment returns the fastest in Valencia (17.06 years), Athens (17.66 years) and Marseille (21.78 years).
With 26 years Bratislava found itself in the middle of the ranking between Ljubljana (25.6 years) and Milan (27.5 years).
Interest in real estate investments impact the price
The steep hike of residential real estate prices during the pandemic was impacted by the change of the offer and demand structure, analysts said. One of the key factors was the demand for flats as an investment.
However, the development was not the same in all attractive European cities and tourist locations. The company stated that apartment prices in Central Europe have been growing at a significantly higher rate than rental prices for a long time.
The difference was further accentuated by the pandemic in 2020, when rental prices in Slovakia fell temporarily, for example.
"As a result of this development, the payback period of flats is longer in Central Europe than in the tourist-attractive countries of Southern Europe. There, including islands such as Crete and the Canary Islands, the return on investment returns relatively quickly despite the fact that the main season takes up only a relatively small part of the whole year,” concluded the company's chief analyst, Lucia Žárska.
