At the end of the second quarter of 2018, apartments under construction numbered 76,000 in Slovakia. This is the highest number since 1996 when the Slovak Statistics Office began to register this data. Because the figure for residential real estate under construction in the early 1990s was low, figures from the second quarter of this year are the highest since the launch of independent Slovakia in 1993, the Trend weekly reported.
In spite of this, demand for new real estate, thanks to record breaking low interest rates on mortgages, is so high that prices for old apartments are rising too. They have increased by 7.2 percent y/y while prices for new real estate grew “only” 6.7 percent y/y.
Prices are driven up not only by demand but also costs when the construction boom itself increases prices not only of construction materials but especially wage costs. Prices for construction work have increased by only 3 percent y/y, but the average wage in the construction sector has already increased by almost 8 percent.
Under the continuing low interest rates, decreasing unemployment and economic growth, construction of residential real estate as well as prices for real estate may further increase. This is also because Slovakia still has, compared to the average of the European Union, a low ratio of apartments to the number of citizens as well as a high share of the population living in overcrowded dwellings – 38 percent in 2016.
Despite geopolitical uncertainty and a slow down in the economic cycle, investment in the global property market has seen a significant rise of 18 percent year-on-year to a new record high of $1.8 trillion, up from $1.5 trillion in 2017. Cushman & Wakefield, which examines global commercial real estate investment activity, assessing cities by their success at attracting capital, came to this conclusion in their latest report.
Fewer than 3,000 new apartments are available on the market of new residential buildings in Bratislava, which is the lowest figure for the past two years. As demand for new apartments is still relatively lively, prices for new units continue to grow slightly, the TASR newswire cited the real estate agency LEXXUS.
The Austrian company Soravia has opened a new retail zone in Liptovský Mikuláš in northern Slovakia, the Retail Park Liptovský Mikuláš. It is 9,000 square metres and is the first investment by the Austrian developer outside Bratislava. The investment totalling €22 million has created 100 jobs so far.
Construction of a brand new bus station and the extensive reconstruction of Mlynské Nivy Street are going according to plan.
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.