The most interesting areas for residential developments in Bratislava are Dúbravka and Nové Mesto. The price of one square meter was 500-600 EUR in these parts of Bratislava a few months ago. Nowadays, it is 15-20% cheaper.

The price of industrial land stayed approximately at the same level as in 2009. They sell in the range of 30-80 EUR per square meter all over the Slovak Republic.

Demand for commercial real estate is the strongest in Bratislava (mainly in the vicinity of the airport and Dúbravka) as well as Košice.

Colliers International expects fixed prices of property throughout 2010. The first important transactions in this segment are expected to come in the second part of the year.

Slovak banks lend more as before recession

According to the National Bank of Slovakia, the Slovak banks approved mortgages in amount of 1.54 billion EUR in the first half of 2010. This is 4% more than in the first half of 2008, still the boom period.

Commercial

Colliers International reported an increase in inquiries for commercial property this summer. Two larger transactions in the last 6 months include the purchase of the 4-star Hotel Mercur (Accor) in Bratislava, close to the Main Train Station, with 175 uniquely designed rooms, opening on September 1, 2010; and the 272-million-euro purchase of a division of Volksbank Europolis by CA Immobilien Anlagen AG, expanding its eastern Europe property holdings, in Bratislava and Chorvátsky Grob.

Slovakia Ring

SlovakiaRing

Quietly, without too much fanfare a brand new 5922m race track came to life in the middle of Europe. The location is near Dunajska Streda, 50 km from Bratislava, 125 km from Vienna, and 150 km from Budapest. Although it has no ambitions to host F1 races, the top-notch facility and the diverse programs arranged around it look impressive. The official opening of the 24.9-million-euro project was April 9, 2010. This is how the official track website describes the venue:

Being a top-notch training facility for motorists, Slovakia Ring is now bringing a unique chance for you to improve your driving skills, try a fast ride, exercise your driving techniques or just enjoy the freedom of sitting behind the wheel. Motorcycle enthusiasts as well as the owners of high performance automobiles will certainly appreciate the unique space for trying the limits of their “swift horses” and an exceptional opportunity to experience the feelings of professionals who run real races. On the other hand, racing teams and agencies have been given an ideal space for conducting racing events of outstanding quality in every aspect. http://www.slovakiaring.sk/index.php?lang=eng

There is much construction work going on around the facility, including a 84-bed 3-star hotel. The expected number of foreign tourists annually is 40,000, providing income for hundreds of local Slovaks. Such developments enhance the excellent touristic appeal of Slovakia with the Tatra Mountains, thermal baths, wine country, horse-riding, hunting excursions, and water sports.

The Municipality of District 5 has recently opened the new ”main street” between Kálvin Square and Szabadság Square. The spectacular HUF 5.5 billion (EUR 20 million) project has already pushed prices up in District 5. The streets have received new decorative pavements and the previous expensive column lighting has been replaced with an energy-saving public lighting system in the revitalization. The beautifully tended public parks, the dazzling interactive fountain at Szabadság Square, and a significant reduction in car traffic, has made this area of the city more friendly, more attractive, quieter and fresher.

The Project

Budapest’s new nearly three-kilometer-long high street running from north to south is an urban axis with reduced motor vehicle traffic between Vigszinhaz utca and Kalvin ter. As one of the largest revitalization projects of urban space in Europe, the project was started in 2006, and was completed with the help of the European Union. LED technology is employed in the street lighting and there is wireless Internet access available throughout. The area includes Honvéd Street, Szabadság Square, October 6. Street, Erzsébet Square, Bécsi Street and Petőfi Sándor Street, Ferenciek Square and Kecskeméti Street together with Egyetem Square.

Aim of the project

Elaboration of a well-proportioned area that meets the new functions of the inner city: parallel with the pedestrian area of Váci Street, development of a new high street joining the adjacent areas. The goal was to develop a main street in the inner city (a further project includes the bank of the Danube) that physically and mentally connects the Downtown to the Lipótváros areas of a different character for city dwellers as well as for the tourists coming to visit Budapest.

The idea of developing an north-south axis of the downtown of Budapest (earlier the town of Pest itself) has been considered by town planners nearly for one and a half century, an example of which is the way Szabadság Square has been shaped to give space to such an axis.

The overall construction after World War II, based on changes to be made fundamentally for a heavy motor vehicle traffic – namely the reconstruction of Kossuth Lajos Street – have literally cut the downtown into two, for decades, while maintaining the north-south transit traffic on the axis of Kecskeméti Street and Petőfi Sándor Street.

Finally, the concept of renewing the functions of the area in question and getting rid of the transit traffic passing through the inner city and its main street, brought more life, increasing real estate value in its wake.

The Residential Market

There is demand for residential real estate in Slovakia; however buyers are much more cautious. The prices are lower, bringing with them lower quality, which is expected to affect new projects in the next 5-10 years. Investors concentrate on sustainability. Low quality projects on the residential market are certainly a looming concern – “This is the key factor that will affect selling in the next couple of years,” explained an expert at the Real Estate and Development Conference, Bratislava on May 3, 2010.

The purchasing power of Slovaks has decreased by only a minimum – the effects of the crisis will be delayed, felt from the second half of 2010, especially in the services sector. The production industry is already going up.

At the moment there are 4000 unoccupied unsold apartments in Bratislava in new buildings. Young families are looking for discounts, good deals – 40-80 m2 apartments. In this atmosphere of oversupply, agencies do not list every apartment, only the ones that have the potential to be sold within 3 months. Around 40% of the current offers on the market are advertized for unrealistic prices, the actual sales price is usually 20% below the publicized price. It is the agents’ responsibility is to inform the seller about the realistic price; if the price is right, the property will be sold within a month. If it is not sold within 3 months it is not worth investing in advertizing at the same price. Agents must be creative in using the right wording to target the proper groups and using uncharted marketing channels.

According to the real estate agency RE/MAX SLOVAKIA the sale and rent of property should increase by 15% in 2010. Prices of residential property have fallen by 10% in the first quarter of 2010. According to the analyst of Postova Banka the prices of houses and apartments were the lowest in the last quarter of 2009. Prices returned back to the level of the end of the year 2007. Any increase will depend on the labor market.

Doom for the Construction Industry

It will be another two years before the apartments currently being built will be bought. The construction sector has fallen 8-12% since 2008/2009. The price of materials continues to drop, the building sector is no longer about revenue, it is merely about survival. The price of labor is going down. 2010 already brought dramatic decrease, new orders are not coming in, the only possibility is EU funds, PPP funds; this will be the year of dramatic downsizing in the building sector, with massive unemployment.

Commercial Scene

All new projects are mostly retail projects – for example Boria, Aupark in Kosice, Central (also residential) on Trnavske Square, and Trnava. Bratislava has potential for one more shopping center, namely in…

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Note images are from 2009.

Panoramic image – click, hold, and move mouse to look around…

Note images are from 2009.

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Entrance of Gozsdu Court from Kiraly Street

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A look into Gozsdu Court from Hollo utca

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Note images are from 2009.