Slovakia Economy Trends
Slovakia’s GDP growth for 2012 is expected to be 3.2%. The real estate prices In Slovakia have dropped by about 10 to 12% over the last 12 months due to the global economic crisis. Due to this balanced economic growth during the boom time there was no significant real estate bubble created in Slovakia as compared to that in Ireland or Spain. Latest research of Central Bank of Slovakia and National Real Estate Association suggests that prices of real estate for housing came to €1,265 per sqm in 1Q, and were 2.5% lower y/y and 0.5% lower q/q. In 4Q of 2010, prices fell 2% y/y, and in 2010 fell 4%. In 1Q, prices were higher in regions other than Bratislava and Trnava.
On an average people living in Bratislava earn up to 50% more than those living in the countryside. The real estate prices in Bratislava are two times higher than those in the countryside. Over 70% of real estate transactions in Slovakia take place in Bratislava and adjoining regions, and about 80% of all mortgage contracts are realized in Bratislava. This year mortgage sales have increased by 18%. The unemployment rate in Slovakia is over 10% and in Bratislava it is 4%. Between 2009 and 2011 the number of newly built unsold apartments in Bratislava decreased from 5000 to 3000. About 85% of the Slovakians own property without any mortgage.
Also known as the country of property owners, the ownership rate for family houses and apartments in Slovakia is the highest among all the EU countries. The proportion of tenants in Slovakia is estimated to be less than 10%, although the exact number is hard to find as some rental units are not registered with the tax office. According to real estate experts Slovaks prefer to own their own dwelling because of their conservative nature, and the feeling of security it provides. A majority of Slovaks prefer to travel for work daily or weekly, rather than changing their residence. On the other hand a lot of Americans permanently relocate for new jobs as many as 10 times during their lifetime. Although Slovaks prefer to own a property than renting, real estate experts say that the rental apartment market was quite lively in 2011.
In the first half of 2011 the industrial real estate market in Slovakia showed signs of recovery. At the end of July about 1.015 million square meters were occupied by industries in Slovakia and the average vacancy rate was only 2.5%, which is the lowest in the entire central European region. Depending on the location and quality of the property the rent for industries and logistics A – category real estate ranged between €3.20 and €5.50 per square meter per month.