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Ski Slovakia and Reap the Investment Returns
January 27, 2008Article by Ray Withers
Why ski anywhere else when Slovakia offers the only truly alpine skiing in Eastern Europe at a fraction of the cost? UNESCO world heritage site, the Tatras Mountains are now maturing into a prime ski destination with stunning investment potential. Resorts in the same mountain range across the border in Poland are considerably more expensive, as are those in Western Europe, whereas Property Frontiers’ brand new Silver Resort offers fabulous pistes in stunning surroundings at a mere slice of the price.
Add to this Slovakia’s flat tax rate of 19%, no stamp duty, tourism expected to increase by 5.3% per year for the next 9 years, talks of budget airlines introducing flights to the country and capital appreciation already in the region of 15% and investment property in Slovakia looks to have a very promising investment future.
At the heart of Europe, Slovakia’s economic growth is outperforming neighbouring countries with GDP growth of 8.3% in 2006 and a similar rate forecasted for 2007. As a result infrastructure, transport and education is expected to go from strength to strength over the next 5 years as the country receives over €11.36 billion in EU structural and cohesion funding. Indeed FDI into the country has increased by an enormous 600% since 2000 thanks to the country’s prime geographic location, low taxes at a flat rate of 19% and cheap skilled labour force which exert a constant appeal over investors.
What is more, since EU accession in 2004, investors have the added benefit of being protected by EU legal rights making investment relatively low risk. Appealing for property investors, foreigners can purchase property in Slovakia without having to form a business meaning the process is further facilitated. Further, accessibility to Slovakia is set to become more straightforward. There are already 4-5 flights to the country each week from £60 but with a high profile budget airline in talks to start flights to the country, the situation should improve again.
In turn this will help fuel the already burgeoning tourist market. UK visits were up 38% between 2006 and 2007 whilst foreign visitors to Bratislava have increased 60% since 2001. As a result, experts predict that tourism will rise 5.3% per year for the next 9 years, a statistic intimating the confidence authorities have in the potential of Slovakia’s market.
In the North of the country lies one of Slovakia’s biggest charms, the Tatras Mountain range. Forming the border with Poland, they are a designated UNESCO World Heritage Site with areas of outstanding natural beauty, and a host of attractions to offer tourists on a year-round basis. Most importantly – they offer some of the only true alpine skiing in Eastern Europe and Slovakia property is just a fraction of the cost of most other resorts.
With complete ski resorts currently in short supply, Silver Resort, located on the edge of the Tatra National Park is likely to be in high demand. Studios, apartments and villas are available from £42,000, £66,000 and £279,000 respectively. With 5% or 6% guaranteed rental options available as well as 80% LTV mortgages, and capital appreciation for the country currently sitting at 15%, investment in this development should guarantee significant fiscal returns. And thanks to limits on construction, oversupply should be avoided meaning demand for holiday homes or lets in main ski resorts will remain high and deliver strong returns.