Abstract
The Slovak property market has been by the slowdown of the global economies
and the tightening of
credit lending by the major banks. Most significant
has been the housing market in Slovakia which had
enjoyed boom conditions
in the previous years prior to the financial crisis. While house prices
overall
have stabilised according in the 1Q09, there have been sharp falls
in apartments and at the luxury end of
the housing market. There is a
current oversupply of high quality apartments in Bratislava that are
currently not selling. Developers have dropped prices by any where between
10-40% to interest buyers.
The fundamentals for commercial property in
Slovakia are also deteriorating. In Bratislava, the vacancy
levels have
moved to 7% in the city centre. Vacancy levels in the outer city areas were
estimated at 8-
10%. While rental prices remained static for the year in
2008, evidence of incentives increasing, shorter
term leases and rising
sub-leasing all suggests rents will come under pressure in the remainder of
2009.
Vacancy levels in the industrial property market have also increased
to over 10%. There is evidence
however in this market the developers have
been quick to react and curtail new development. The retail
sector also
faces oversupply issues - in particular in Bratislava -in the next few
years.
The most positive interpretation that may be made of the recent
slump in the number and value of
transactions is that – except
perhaps in some upscale residential projects – there is little evidence
of
forced selling. However, the pressures on prices across all sectors
remains downwards.
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