FINANCIAL problems faced by the owners of real estate are sending more reclaimed properties to the auction block in Slovakia. The number of auctioned properties is well above the level before 2009 and the number of such properties that could be tagged as luxurious is increasing, according to Martin Krnčan from Dražobná Spoločnosť, an auction company, the TASR newswire wrote in early August.
“The financial and real estate crisis is far from being over; there is still a lack of money in circulation,” said Krnčan, adding that Dražobná Spoločnosť has been reporting an annual 100-percent increase in real estate auctions for the last two years.
Before January 2010 the company had approximately 150 active auctions but in early August 2011 it was about 550, Krnčan said, adding that not only are there more new auctions but the number of successfully-closed auctions has been decreasing as well.
The behaviour of creditors, which are mostly banks, has also changed, according to Krnčan, noting that they have changed their internal procedures and a debtor neglecting his or her financial obligations will find their property sent to auction or threatened with auction sooner than in the past.
“The aim of banks, of course, is not to auction off all the real estate but they are starting to use [the threat of] auction to a greater extent as a means to force debtors to at least start dealing with their problems,” said Krnčan, adding that in the end only a small portion of overdue property loans are resolved in an actual auction.
Krnčan now sees more lucrative real estate in better localities being involved in auctions, while in the past it was more typically apartments in residential complexes that were auctioned.
“Currently, it is also common for an apartment located in the Bratislava centre, worth between €150,000 and €200,000, that its owner has not been able to sell that is being sent for auction.”
31. Oct 2011 at 0:00 | Compiled by Spectator staff