Nine out of ten Slovaks own the property in which they live. Within Europe, only Romania has a higher ratio. In Germany and Austria, it is approximately 50:50.
According to Maroš Ďurik, the CEO of Across Private Investments, Slovaks believe that to have one’s own roof over one’s head is one of the biggest certainties in life. The labour market supports this mentality as Slovaks are not pressed to travel in order to find employment.
Owning real estate does not represent a useless burden. The emotions tied up with owning property also have to be taken into consideration.
“But let’s look at facts without emotion. In Karlova Ves in the capital, there is a new 4-bedroom flat, with parking space, for sale at 250,000 euros. In the next building, the same developer is offering to rent a similar flat for 800 euros a month. Which would be more advantageous – to buy or to rent?” asks Ďurik, as quoted by the TASR newswire.
“Let’s imagine that if we buy the flat, we will use our own money for 30 percent of the price and take out a mortgage at 1.5 percent p.a. over twenty-five years for the rest. The monthly repayments will be 700 euros plus the costs connected with the mortgage such as insurance against failure to repay and the costs connected with ownership such as repairs, insurance, taxes etc. which would add up to about 100 euros a month. Thus the cost to lease and of ownership are basically the same,” he summed up for TASR.
“Moreover, in the last ten years the price of real estate has grown 1 per cent faster than inflation. So after 25 years the investment will have a value of 320,000 euros,” added Ďurik.
In the industrially advanced countries, rental gives people the independence and flexibility to move. Children grow up and leave home and paying a mortgage for empty rooms is not very effective.
People from post-communist countries tend to buy liabilities. They feel rich when they have a great car, a seaside apartment, a cottage in the mountains but these investments do not bring anything in the end; conversely, they cost money.
The result of this is that Slovaks are among the most indebted and poorest citizens of the EU. While the property of an adult in Germany is worth on average 178,000 dollars (170,514 euros), in the Czech Republic this figure falls to almost 42,000 dollars and in Slovakia it is only 24,000 dollars, according to the Credit Suisses Global Wealth Databook 2015.
However, according to Ďurik, there is one big advantage to the present development “boom” in Slovakia. The market for rental property is growing so rent will fall. Leasing property will become more advantageous than ownership.
Currently there are only two supermarket chains operating in Ilava, CBA and Lidl. Now the German supermarket chain is planning to replace its old shop with a completely new store to be built on the same street, only 500m from the original.
A new shopping centre at the Senica Retail Park was opened a few days ago by the development group VIWO. It sits alongside pre-existing retailers such as Kaufland, Family Centre, hobbi and Tanker.
Reality Trend reported that Park One, the fully occupied administrative building at the corner of 1. Máj Square and Kollárovo Square in the centre of Bratislava, was sold by its Luxembourgian owner for €35.6M to the ČS real-estate fund administered by the investment company, Reico of Česká sporiteľňa.
The intention to build a new block of flats on the previous site of Matador in the Petržalka district of Bratislava has been announced and construction works are due to begin in the third quarter of this year after a suitable building company has been chosen, reports Reality Trend. The Matadorka project envisioning 335 flats and apartments was conceived by the development company of the architects VI group.
Immocap, the company behind the Central shopping centre in Bratislava, is preparing a new aquapark project in the surrounds of Piešťany. The developer estimates that construction work could begin in 2018. Their ambition is to create a relaxation complex which would attract hundreds of thousands of visitors per year, wrote TREND Reality.
In most parts of Slovakia there has been an inter annual price rise for residential real estate.
Koral, a new combined shopping and entertainment centre, was opened at the end of December with the aim of attracting customers to spend their free time there, the Reality.etrend.sk website reported.