The new indebting rules tightened by the National Bank of Slovakia (NBS) will primarily impact citizens of the Slovak capital, Bratislava. They will be able to buy on credit, from an average wage, maximally a one-room flat in a new building or a two-room flat in an older block of flats. Other regions will be significantly less affected by the new lending cap, Poštová Banka has found out.
Based on the new lending cap effective as of July 1, the total indebtedness of an individual must not exceed eight-fold his or her annual net income. The share of loans provided above this level will gradually decrease and as of April 2019 cannot exceed 5 percent.
While the new rules will apply to new loans, the old loans of the applicant will be taken into consideration.
People especially interested in purchasing more expensive real estate will be impacted by the tightening of the rules. Their net income may not guarantee a loan big enough to enable them to buy such housing.
For example, in Bratislava Region the average monthly wage is €1,200, which means a net wage of €902 for a single person. Thus he or she will be able to borrow €86,592 at the most. In other regions it will be even less.
The bank warns that when buying new housing the buyer will need cash equalling 20 percent of its price as well as the central bank limiting the number of mortgages provided above 80 percent of the real estate price. Thus, an average Bratislavan will be able to buy housing up to €108,240. When the average prices of real estates are taken into consideration, this will be enough just for the purchase of an apartment 56.82 square metres in size. In the case of new residential buildings, this will be enough for just one-room apartment since their price climbs to €3,000 per square metre.
In other regions of Slovakia the situation will be more favourable. The reason are the lower prices. But in these other regions the more expensive apartments in new residential buildings will be less affordable for many, according to Poštová Banka.
The PNK Group, an international developer of industrial and logistics real estate from Russia, has joined the European real estate market by constructing a new industrial park called PNK Park Sereď in western Slovakia. Spanning 45,000 square metres of industrial space, the park offers premises for various uses: storage, distribution centres and light industry assembly halls.
After the British carmaker Jaguar Land Lover (JLR) announced its plan to build a brand new plant in Nitra, local real estate prices skyrocketed. Now the situation seems to be calming down. This is because the central bank has tightened conditions for taking out mortgages as well as developers announcing projects for the construction of new apartments.
The Czech investment fund Arete Invest, focusing on investment in real estate, is building a new warehouse for the international chain of fashion e-shops Factcool in the industrial park at Nové Mesto nad Váhom.
Investors in Slovakia are becoming more interested in launching their projects on brownfield sites or old industrial premises, Martin Varačka, head of the department of industrial real estate at CBRE Slovensko, confirmed for the TASR newswire. Apart from their further use for manufacturing or warehousing, new functions including residential ones may also be found for such sites.
The average price of flats in all eight Slovak regional capitals increased over July. Nevertheless, the increase of a mere €8 per square metre, from €1,613 to €1,621 per square metre, is the lowest month-on-month increase over the last few months. Thus, the expectations of Vladimír Kubrický, analyst for Realitná únia, have been fulfilled after he predicted that, following the tightening of conditions for taking out mortgages introduced by the National Bank of Slovakia as of July 1, 2018, there would be a stabilisation of prices.
Investors invested almost €500 million into commercial real estate in Slovakia during the first half of 2018. This almost equals investments for the whole year of 2017, which amounted to €535 million, the data of the real estate consultancy company JLL indicates.
One Fashion Outlet 1 near the village of Voderady, the biggest outlet centre in Slovakia, has filed for bankruptcy, the Trend weekly informed. The further fate is now in the hands of the courts.