Real Estate, page 17
Housing and investment in Slovakia
Real estate consultancy services in Slovakia
CB Richard Ellis
Lower prices and interest rates may spur home sales
AFTER the turbulence during the economic crisis, the fall in housing prices, and the halt or slowdown in new projects, the residential property market has now stabilised. Official statistics report a continuing slight decrease in the prices of apartments and houses but since real estate tends to mimic the country’s general economic development, moderate improvements in Slovakia’s economy and record-low mortgage rates have recently helped generate more activity in the market. But it will be necessary to wait and see whether developers have learned a lesson and started to take into account the wishes and finances of potential buyers when drawing up new projects.
Slovaks are slowly beginning to address energy performance in building design
RISING energy prices and concern about the fate of the planet are affecting the real estate market. Users of real estate, whether residential, office or industrial space, are trying to reduce energy consumption by better use of insulation; and builders of new developments are using the latest technologies and materials as well as new designs to cut heating bills while keeping or even increasing the comfort of the properties themselves. The idea of low-energy or passive houses is not yet widespread in Slovakia but increasingly stringent standards set by law for new buildings, as well as rising energy prices, offer real hope that such properties will become more common in Slovakia despite their higher initial cost.
Institutions and organisations in construction and real estate in Slovakia
Ministry of Economy
Metropolis casino plans modified
THE INVESTOR in the Metropolis multi-functional complex planned for Jarovce on the outskirts of Bratislava has reduced the size of its planned casino. Gábor Zászlós, the chairman of the board of directors of Trigranit, the developer of the €1.5-billion project, announced in early October that the company is reducing the casino’s size from its originally-planned 27,000 square metres to around 19,000 square metres, meaning that the gaming area would comprise around 2 percent of the whole development instead of 3 percent.
Architecture seeks missionaries of the aesthetic
For architects, the ribbon-cutting ceremony is by no means the end of the adventure: the greatest reward (and best advertisement) is when their works are used, admired, or, in the perfect scenario, awarded prizes. The good news in Slovakia is that while doing a good job can be hard work, when it comes to winning prizes there is no shortage of prestigious competitions.
Key developments in the real estate and construction sector
November 2008 – Construction of units 3 and 4 of the nuclear power plant of Slovenské Elektrárne in Mochovce resumed. The new nuclear reactors and auxiliary buildings should be finished in 2012 or 2013 and will cost about €2.775 billion.
Cross-border market attracts buyers
Bratislava’s location next to two of Slovakia’s neighbours, Austria and Hungary, has helped boost the real estate market in foreign villages close to the borders. Over the past few years Kittsee, Wolfsthal, Rajka, Mosonmagyaróvár and others have become cheaper, and in other ways advantageous, alternatives to the Slovak towns and villages surrounding Bratislava. Real estate experts working in this segment say the impact of the crisis on them hasn’t been huge and they are expecting business in this area to grow further in the future.
Shopping centres still growing – so far
Slovakia’s development prospects for retail shopping properties are less gloomy than the predictions for other parts of Europe. However, the shopping centre projects planned for completion in 2009 and 2010 are still reflecting the pre-crisis optimism of developers and the economic conditions for further development of the retail sector may not be as rosy in coming years.
Housing loans on upswing despite economic slowdown
In response to the spreading waves of the global economic downturn, which crossed the Atlantic and reached Slovakia in the third quarter of 2008, banks have toughened their lending criteria just as potential borrowers have reduced their appetite for making large purchases. But after a shaky first quarter in 2009 the mortgage market now seems to have stabilised, with homebuyers more willing to take out loans even with the uncertainties in the labour market, according to both banks and experts in the real estate market.
Sufficient office space is on the market
The current tight-fisted approach of banks to financing new real estate projects is likely to leave fingerprints on the way the market for office space will look in the upcoming years, market watchers agree.
Cutting costs - a cliché, or a necessity?
Terms like crisis, layoffs and cutting costs have been mentioned for several months in the international as well as the local media, in various contexts and with various meanings. Readers, whether they work as CEOs or heads of department, could get the impression that there is nothing more important right now than how to cut costs. Due to the quantity of newspaper articles, analyses and advice on this issue, one might also get the impression that this has almost attained mythical status, a phrase that has permeated the whole economy and has become a part of the agenda of every management meeting.
Residential property prices continue to fall
The Slovak residential real estate market has not escaped the effects of the global economic crisis. After the preceding boom in new housing projects triggered by economic growth and high demand – when new units were sold even before builders had time to realise the visions of the architects – the situation has changed completely. Now it is the customer who rules the market. Developers, in an effort to sell apartments in their new projects, are offering incentives in the form of special equipment or free parking places. But customers are thinking twice before they buy an apartment, bearing in mind their current financial situation and future prospects.
Ready for shopping? Leave the city centre
Sightseeing is not the only activity tourists seek when visiting a city. Some visitors prefer New Bond Street to Trafalgar Square in London and Avenue des Champs Elysées to Notre Dame Cathedral in Paris. ‘High Streets’ and endless opportunities for window shopping and making unique purchases belong among tourist interests – for some people they are even at the top of their list. Enthusiasts of shopping tourism arriving in Bratislava, however, need to mostly bypass the city centre and have to look towards the more suburban shopping malls.
Recovering, albeit slowly
By the end of 2009 it has become obvious that pundits who were talking about the golden days of the real estate business were referring to times past when there were available funds for developers to wrap up their ambitious projects or start new ones, as well as for purchasers to buy a new home, relocate into a better office building or add to their industrial properties.
Eurovea and River Park near completion
Before the global economic crisis reached central Europe, Slovakia was hitting double-digit economic growth and it fed a zest by customers for luxury residences as well as confidence by real estate developers that they could sell whatever projects they put on the drawing board. During those years several projects catering to those with fat wallets started construction and several other projects entered the pipeline.
Real estate consultants:Banks must grease the wheels
While admitting that the current situation is difficult, they are already seeing the first signs of recovery in the real estate sector and believe that good times for developers and investors will return. They also say that the financial markets are recovering in certain parts of Europe and hope that lending will improve in Slovakia too: the question is when. Leading real estate consultants agree that it is the banks that need to grease the wheels and provide funds to make real estate attractive again for purchasers and the industry. The Slovak Spectator spoke to Andrew Thompson, managing partner of Cushman & Wakefield, Jörg Kreindl, managing director of CB Richard Ellis and Peter Nitschneider, Associate Director and Head of Investment and Professional Services at King Sturge, about the pains and the prospects of the real estate market in Slovakia.
Crisis delays PPP highway projects
AFTER Robert Fico’s cabinet took power in 2006, it promised to join Slovakia’s rich west to its less fortunate east with a highway by 2010. Its ambition was to build more than 150 kilometres of highways, by making use of public-private partnership (PPP) projects. It is now apparent that this ambitious goal will not be met as the global financial and economic downturn has led to a series of project postponements.
Five stars in the High Tatras
AFTER four years of extensive reconstruction, the Grand Hotel Kempinski High Tatras, the first hotel in Slovakia bearing the Kempinski hotel brand, opened its doors to guests earlier in May. The luxurious facility aims to provide services to a demanding clientele, the TASR newswire wrote.
Real estate portals in Slovakia
www.reality.sk www.reality.server.sk www.living.spectator.sk www.katasterportal.sk (also available in English)
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