The development of residential real estate is reflected by especially favourable credit conditions, but also better than pre-crisis layouts of new residencies when large apartments meant high prices.
Residential real estate remains to be most expensive in the Slovak capital, Bratislava. One square metre of residential space costs €1,638 in Bratislava Region during the second quarter of 2014, Nitra Region was the cheapest with the price at €579 per square metre, based on the data of the National Bank of Slovakia (NBS). Košice Region was the second most expensive with €924 per m2 followed by Trenčín Region at €819 per m2. Regions of Žilina, Banská Bystrica and Prešov registered prices between €748 and €797 per m2 and Trnava Region was at €626 per m2.
“Over the last year, the number of real estate transactions increased robustly,” Daniela Danihel Rážová, director of real estate agency Bond Reality and head of Slovakia’s Association of Real Estate Brokers told The Slovak Spectator, ascribing this to availability of credits and excellent credit rates of banks, which renewed real demand. “But this has caused prices of real estate in selected localities, especially in the capital, to rise even by 5-10 percent between January and July.”
Michal Zajíček, an analyst of the real estate market at the real estate agency Lexxus, evaluated the last year on the real estate market in Bratislava as rich in new successful projects, with a sound offer of apartments. According to him, especially the sale of so-called starting apartments, meaning small and cheap apartments bought by youth wanting to separate from parents, or young families, increased the number of transactions. These are built in new construction as well as in re-built dormitories, offices and other real estate localities.
“Projects of the starting living, as they were less demanding for preparation, grew as mushrooms after the rain and they were sold out at the same pace,” said Zajíček. “The purchase of such apartments was simply advantageous. It was possible to buy for a reasonable price a two-room apartment in a functioning locality with amenities, good access, parking and so on. Thanks to these projects investment purchases started up again.”
The supply of such apartments was sold out in the summer and projects of classical new constructions by developers remained on the market.
“These cannot compete in terms of prices with the mentioned re-constructions and they do not sell apartments in tens per month,” said Zajíček.
In terms of the size and number of rooms in apartments market watchers did not see any change in Bratislava compared with the previous year. According to Danihel Rážová, one to three room apartments are the most coveted in the ideal price range between €55,000 to €110,000.
Zajíček added that the biggest interest is in two-room apartments followed by three-room apartments with the latter beeing more required on the secondary market especially in the case of older real estates.
“This is especially because of the price, which in the case of older real estates is comparable with the category of two-room apartments in new constructions in the same locality,” he said.
The demand and supply of residential real estate is balanced, while the offer of cheap one and two-room apartments is still relatively low, according to Danihel Rážová.
In this respect Zajíček added that there are 2,790 free apartments on the Bratislava market while their number again moderately increased after a long-term decrease.
“Actually, what is built is also sold,” said Zajíček adding that there are no slow sellers.
Danihel Rážová agreed, adding that new projects with reasonable prices are arriving on a market with fewer apartments, and are sold in a very short period of time.
The next development will depend on the situation in the banks and their offer to lend money, according to Danihel Rážová, who welcomes the recent tightening of conditions for the provision of mortgages by the National Bank of Slovakia (NBS).
“As prices in some localities grow rather ‘artificially’, we welcome the approach of the NBS,” said Danihel Rážová, adding that by this measure, even though this will reduce the real demand and availability of loans for lower middle classes, banks would avoid the real estate bubble when people, who might have problems paying off their loans in the future, do not get loans. Apart from the availability of loans, the residential market will be affected by standards of living of citizens and the offer on the market.
In terms of new projects, Zajíček highlighted the expected project Zuckermandel in the historical neighbourhood below the Bratislava Castle and also the Nový Stein project to be built on the premises of the former Stein brewery.
For more information about the Slovak business environment please see our Investment Advisory Guide.
24. Nov 2014 at 0:00 | Jana Liptáková