Buy Completed New Apartments
Instead of off-plan
SLOVAKIA
In Bratislava the value of resale old apartments (the least-sought-after product) went down 20-30%. Of course not everyone advertises at this level yet, however, if someone wants to sell, there is no choice. This applies to the featureless old buildings. This means we have 2006 prices, around 1850 EUR/m2, we are down to more realistic “Budapest levels” in Bratislava.
This price dive does not apply to new off-plan units, however. Developers saw no reason so far to decrease prices, in spite of them being approached daily by aggressive agents and investors looking for 30-50% discounts. They are satisfied with the ongoing sales, there is a strong local demand, and there is no sign of discounts for buyers or commission for agents. Apparently, they are very confident, even those who are just beginning sales and construction is still far ahead. In the meantime we hear of companies which have completely halted construction works for the year. Trustworthy sources report that certain banks have fully canceled developer financing on specified projects, demanding their money back, and are renegotiating terms with others.
HUNGARY
The latest news which rocked the Hungarian market is the massive currency fluctuation. The Hungarian forint weakened from around 230 HUF to the euro back in July to nearly 280 now. Today the mid-rate of the National Bank stands at 271.9 to the euro. GBP is 335.82. This means a 17% devaluation compared to the original value! This is only around 15% in the case of the GBP during the same period.
Hungarian property, which was already the cheapest in the region, suddenly became 17% cheaper. Hungarian products and services are even more affordable now.
To restore the trust of foreign investors in the Hungarian currency, on October 22 the National Bank increased the base interest rate from 8.5% to 11.5%. This stopped the falling currency. We are back in the era of double digit interest rates which characterized the period before and immediately after accession to the European Union.
