Should You Invest?
The Slovak Republic enjoys rising prosperity and an ideal
central European location and as such has great investment
potential. Although Slovakia has the second highest rate of
unemployment in Europe after Poland, things are changing.
Unemployment rates dropped 10.69% between 2005 and 2006 and a
further 12.82% between 2006 and 2007. This trend is expected to
continue over the coming months which should boost the Slovakian
economy significantly.
- Whilst joining the EU in 2004 did not necessarily help Slovakia
to stabilise or ensure any returns on investment, it did guarantee
EU legal rights to all investors.
- Since May 2004, foreign nationals no longer need to establish a
company to purchase a property meaning the purchase process is
facilitated.
- Slovakia has one of the fastest growing economies in Europe and
has out-performed all of its neighbouring countries over the last
two years.
- The National Bank of Slovakia has also cut the interest rate to
4.25% which will make the cost of borrowing cheaper and should
entice more people to invest.
- The government has introduced a new flat tax of 19%.
- With plans to adopt the € in January 2009, mortgage borrowing
should become even easier which will give the property market a
boost.
Rental Yields
Bratislava is the country's capital and therefore a very popular
residential area. In central Bratislava rental yields are high on
apartments whilst houses in the suburbs generate slightly lower
returns. For a 60 sqm flat in central Bratislava you can
expect to find rental yields of around 6%. In the long run, houses
are rented for longer than apartments so will achieve higher rental
yields.
Price History
Like many of the new European member states, Slovakia has a real
estate market sharply divided between an expensive capital and
regions across the rest of the country which are a lot more
affordable. After the fall of the communism, the Slovakian property
market experienced a 10 year lull when all building ceased.
Construction firms are now responding to this intermission and have
re-commenced building projects to satisfy increasing demand for new
buildings. As a result of this growing demand property prices are
growing steadily and increased by 15% in 2006.
In Bratislava prices are now comparable to any other European
capital, with apartments selling from €44,000 up to €200,000.
Prices however are still said to be 30% cheaper than more exclusive
cities such as Prague. Prices in more rural areas remain less
expensive and it is not uncommon to find a villa for as little as
£30,000.
Top