Real estate aimed at providing housing will continue to become more expensive in Slovakia. The prices of residential real estate are growing in all developed economies, the National Bank of Slovakia (NBS), the country's central bank, reported but added that this growth is exacerbated in Slovakia by other factors such as the sharp rise in prices for building materials combined with a low supply of housing.
“The consensus is that the high prices are caused by low-interest rates and a marked increase in savings during the lockdown,” said Peter Majer, spokesperson for the NBS, as quoted by the SITA newswire. “Another factor contributing to the situation in Slovakia is a low supply.”
The current situation is extraordinary in the sense that reopenings after the second wave of the pandemic caused an increase in the demand for housing rather than supply, he added. The pressure for prices to rise is, therefore, higher than it was in 2020.
It will get worse before it gets better
Pavol Kožík, CEO of the Proxenta company, shares this opinion. In Slovakia, but more so in the capital city than anywhere else, there does not seem to be a real estate bubble, but rather a lack of apartments. The demand for housing is greater by an order of magnitude than its supply.
“And in the next two to three years, things will only get worse,” he said, as quoted by SITA. “The prices of flats will rise to the point that some people in Bratislava will not be able to afford their housing.”
What he imagines might alleviate the situation would be building social housing which could be rented out, a solution that lacks a legal framework or political willpower to be implemented.