IN BRATISLAVA, a two-room flat can cost Sk1.5 million.
photo: Ján Svrček
Last year, flat prices rose by 30 per cent overall, and the National Association of Real-Estate Agents (NARKS) expects them to rise again this year by 15 to 20 per cent. House prices are also rising but more slowly, at 10 to 15 per cent.
At 310 per 1,000 inhabitants, the number of dwellings in Slovakia falls well below the EU average of 450 dwellings per 1,000. As such, it is quite usual for several generations of one family to live in the same unit.
In order for the country to reach EU levels, almost 600,000 new flats or houses would need to be built in Slovakia over the next few years. However, the Slovak Statistics Office reports that the year-on-year increase in housing is only 1.2 dwellings per 1,000 inhabitants, lower than in most other European countries and below the level needed to close the gap.
Laurie Farmer, managing director of the Spiller Farmer real-estate consultancy, sees the lack of suitable building land as one of the main factors for the shortage of housing and the rising price of properties in Bratislava, the country's most expensive region.
"There's a particular problem that the land is actually parcelled up into very, very small strips. You can't find appropriate parcels of land for additional housing just on the edge of Bratislava," said Farmer.
"The prices of apartments in Bratislava at the moment are basically built on the fact that it's very difficult to do something with family housing outside of Bratislava. Once that [changes] I think it will be much more difficult for people to sell apartments," Farmer added.
While the highest prices for both renting and buying property are still in the capital, where the average purchase price of a three-room flat is Sk 1.5 million (35,600 euro), prices vary considerably across the country (see table).
In other big Slovak cities like Košice and Banská Bystrica, three-room flats sell for around Sk1 million (23,800 euro), but in the small central Slovak town of Veľký Krtíš a similar flat costs as little as Sk250,000 (6,000 euro).
"I'm completely surprised by how the prices of property, mainly flats, are rising at the moment. We're getting prices we've never seen before," NARKS president Vladimír Guttek told the daily Pravda.
"A year ago we would sell a three-room flat in Prešov for between Sk680,000 and Sk700,000 (16,200 and 16,700 euro). Today the prices are closer to Sk1 million (23,800 euro). In Bratislava the growth of prices is even stronger, and it is not unusual to ask Sk1.4 to Sk1.5 million (33,300 to 35,700 euro) for a two-room flat," he said.
Property values in communities near cities are also on the rise, as more people opt to commute. One- and two-room flats in Pezinok and Modra, within easy distance of Bratislava, now cost almost the same as those in the capital itself.
Flat prices in Trnava, also a short commute by rail or road to Bratislava, have risen sharply in recent months, following the announcement of plans by PSA Peugeot Citroen to invest 700 million euro in a new plant there, bringing up to 10,000 jobs to the area.
Prices for individual flats in Trnava have jumped by as much as Sk500,000 (11,900 euro) according to local real-estate agencies, and for the first time some flats in the city are on sale for more than Sk2 million (47,600 euro).
The rapidly growing prices in Trnava and the capital are already tempting foreigners looking to invest in real estate, said Farmer, adding that he is often asked about investment possibilities in the Bratislava area and is optimistic about the market's development.
"We would generally recommend that people invest in real estate here because the growth is substantial, and I don't think you can compare it with other types of funds that are offered in private banking. [Yields] proposed by those companies are actually very small compared to real estate in Bratislava," Farmer said.
However, any foreigners eager to acquire property in Slovakia will find there are still restrictions in place. Until Slovakia's EU entry next spring opens the real-estate market to foreign individuals, only Slovak citizens and legal entities can buy and sell land.
"[The regulations] create complications for certain people, but for those who want to invest money I don't actually think it's a hurdle," said Farmer.
"The only difficulty is that either you need to get married to a local person or set up a company - whichever you find easier."
17. Mar 2003 at 0:00 | Conrad Toft