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General Information about Slovak Real Estate

Why is it so popular to buy real estate in Slovakia nowadays? There are several objective reasons:

Firstly, it is an opportunity to be a part of a new culture, history and traditions. Real estate purchase in a country where you would like to spend a lot of time will let you not only enjoy its beauty and landmarks at your leisure, but also to explore the country itself, people, language and different cultural characteristics of this place. If you have a look at the map, you can immediately notice that Slovakia is located in the middle of Europe or, as Slovaks say, in “the very heart of Europe". The country shares border with five countries: Austria, Hungary, the Czech Republic, Poland and Ukraine. It is a great opportunity to travel throughout Europe quickly and easily, in all directions.

Real estate in big cities in Slovakia is highly valued in the world market, and at the price and prestige value is compared, for example, with a Spanish castle or a villa on the Cote d'Azur in France. Such a high estimate of Slovak real estate is reasonable, as the cultural and world heritage of this country are fundamental factors in pricing policy. Slovakia is highly competitive with other European countries in the resources for active summer and winter leisure, in hot springs and recreational areas that attract not only many tourists but also big investors. Slovakia offers its customers a large variety of real estate items: from modest houses in rural localities to luxury villas in Tatra Mountains and apartments in historic houses in Bratislava. The prices for Slovak real estate also vary in wide range, for example, a lower threshold seems to be quite acceptable for a Russian middle class citizen, and the prices for real estate with historical heritage – sky-high.

The second important factor is safety – very important characteristic when choosing a place of residence. Everyone wants to live in a place where he/she can be unalarmed not only about his/her own safety but also about the safety of his/her friends and family. The same concerns the safety of their personal property when there is no danger of property disclosure at the hands of the state or its illegal confiscation.

There are no rational, religious conflicts and territorial disputes in Slovakia that, unfortunately, many other countries have, as a result Slovakia has one of the lowest crime rates in the EU.

Furthermore, for parents it is always important to choose the most favourable environmental place for their children. There are no metropolises with gassing air in Slovakia, and all manufacturers correspond to common European Standards. And what could be better for senior citizens – to be a property owner in the country with a wonderful climate, responsive attitude and affordable living expenses?

Thirdly, the real estate – it is a perfect investment, and a foreign real estate is one of the best investments. Real estate abroad together with long-term financial plan enables you to have a decent and stable income. In contrast to the equity shares, bonds or other securities, real estate – is material wealth. In case of stock market crash, military action of super states in the world or poor harvest – the price for real estate remains more or less stable.

If you decide to make investment in real estate and to buy a house or apartment in Slovakia, it is possible to rent it out, which will bring you an additional source of income. At first sight this income is less than a one-time profit on a sale, however, it is periodic. And if you are stable engaged in this business for a long period of time, consequently the total income exceeds the value of real estate item in case of a sale. If you decide to use the Slovak real estate for yourself, it is possible to rent it out during your absence. 

Fourthly, the best cost of living. Many people want to migrate to Europe, but to the best of their financial ability, fail. Mostly because European countries are quite expensive for living. Usually people prefer buying property in countries where both high living standards and low cost of living are combined. Slovakia in this regard is one of the ideal variants.

 

 

The cost of real estate in Slovakia: purchase and renting

Initially, it is worth noting that there is no objective analysis of market selling prices for real estate in Slovakia, which could be possible, for example, with Cadastral Register based on the prices indicated in the sales contracts. A lot of agencies or concerned parties have their own subjective analysis, and the results often differ from each other. The most reliable is analysis of the National Bank of Slovakia, based on the cooperation with the National Association of Estate Agents. However, this isn’t about the prices, originating from the purchase and sale contracts or Cadastral Register, and the prices reflect the selling prices of the offers in the advertisements of real estate agencies, that are members of the Association, but they do not include the prices of the bargains outside the real estate agencies or through the agencies that are not the members of the Association. So the actual prices will be by a few percent less. The prices in the analysis are also a combination of primary and secondary housing market.

The peak of real estate prices in Slovakia has been reached in the second quarter of 2008 in the amount of 1 549 EUR, moreover in Bratislava the maximum price was 2 019 EUR. Thus, Bratislava is the only region in Slovakia, where the average price per square meter exceeded 2 000 EUR (in the second quarter of 2008), the only region in Slovakia with a price higher than average and currently is the only region with a price above 1 000 EUR (1 652 EUR).

Compared with the peak of real estate prices in the second quarter of 2008, the average price for housing in Slovakia has decreased by the end of the second quarter of 2014 to 21.82%, i.e. 338 EUR per square meter. Real estate prices nowadays hit a historic low. The average mortgage interest slid down from a peak of 6.36% in December 2008 to 3.44% in August 2014. The decline amounts 2.92 percentage points, i.e. almost by half. Here you can read more detailed information about mortgages in Slovakia.

Currently we observe minimum prices for real estate throughout Slovakia. In the fourth quarter of 2013 and in the first quarter of 2014 prices were at the bottom in four of the eight regions in Slovakia: Trnava (815 EUR), Trencin (636 EUR), Kosice (894 EUR), Prešov (769 EUR s). In three regions the prices were within ten euros from the minimum prices in Bratislava (1652 EUR), Nitra (584 EUR), Banská Bystrica (731 EUR). An only in one region – Žilina prices were significantly (48 EUR) higher than the minimum price in early 2014 (795 EUR compared to 747 EUR).

In the second quarter of 2014 prices have dropped even more, and compared to the first quarter fell in five of the eight regions in Slovakia. Minimum prices now are in Bratislava (1638 EUR), Trencin (626 EUR) and Prešov (767 EUR), as well as on the average of Slovakia (1 211 EUR).

The most significant price reducing in 2013 was noticed in Kosice, where reduction in prices for realty was 8,12%: from 955 EUR down to 894 EUR, at the same time in Bratislava reduction in prices was 1,85% and in  Trencin and Zilina prices for realty have even increased. Comparing current prices to maximum prices, we can notice the biggest reduction in Prešov Region (-32,84%), which is the only region in Slovakia where price reduction is more than 30%. Prešov Region is situated in North-East of Slovakia, at the border with Poland and Ukraine, where in some localities houses are sold for 10 000 – 15 000 EUR. In Bratislava prices have been reduced for 18,18%.

 

Real Estate Prices in Slovakia, by region (in EUR)

Average Prices of Real Estate in Slovakia

Comparing average salary among regions of Slovakia and realty prices, it appears that in the first quarter of 2014 man can buy 0,74 sq.m. of living space in Bratislava Region and 1,36 sq.m. in Nitra Region for his average monthly salary.

Price for square meter of living space in Slovakia by regions (according to second quarter of 2014)

Region Price
Bratislavský kraj 1,652 EUR
Košický kraj 894 EUR
Trnavskýkraj 827 EUR
Prešovský kraj 795 EUR
Banskobystrický kraj 777 EUR
Žilinský kraj 731 EUR
Trenčiansky kraj 363 EUR
Nitriansky kraj 584 EUR


Approximate monthly rental cost in selected cities in Slovakia (including utilities), amounts in EUR (according to the 2nd quarter of 2015): 

  Studio 1 room
apartment
1 bedroom
apartment
2 bedroom
apartment
Bratislava 250-350 350-500 450-700 600-900
Košice 200-350 300-450 400-600 550-750
Prešov 150-250 250-400 300-550 400-650
Nitra 200-300 300-450 350-550 400-600
Trnava 250-300 300-450 350-550 450-600
Senec 220-300 350-400 400-550 400-550
Poprad 150-200 200-300 250-350 350-500
Veľký Krtíš 100-150 100-200 200-300 300-400

Above prices are indicated for average level furnished apartment, including utilities. If a flat is situated in a downtown area or it is a top rank apartment – the prices will be higher. If a flat does not have furniture or you are a lucky – the prices will be lower.

A studio flat (Slovak: Garsónka) – is a special type of the smallest apartment, which includes, beside bathroom and toilet, only one small room, which serves as a kitchen, living room and bedroom. 

There are few factors that cause reduction in prices for realty in Slovakia, the main are world crisis and comparatively high unemployment in Slovakia. Also important is demographic factor. During late 1970s around 100 000 children were born annually, but this number went down at the beginning of 1980s significantly. Assuming that 1970s generation has already bought apartments, 1980s generation’s demand would be significantly below. Before crisis in 2008 a large amount of apartments had been built, much of which had been bought as investment, not for living. Up to now at the real estate market in Bratislava for instance remain several thousand of unsold apartments. There is also some uncertainty in euro-zone, owners of realty do not want to sell immovable property and potential buyers during hard times do not want to take loans for several decades, not being sure in the next day. We should also take into account the increasing of bank tax for deposits of individuals in Slovakia and its implementation for legal entities, which is expected to cause gradual rising of mortgage interest in Slovakia. Important fact is that the share of four biggest banks at mortgage market is 72 %, which does not establish favorable conditions for competition.


Real Estate in Slovakia and foreigners

There are no considerable restrictions concerning real estate for the foreigners in Slovakia. There is no need, for example, to obtain a permit for real estate purchase, as it is in the neighboring Austria or Hungary.

The only restriction applies to foreign nationals without permanent residence in Slovakia or foreign legal entities when obtaining real property rights, which is a farmland or forest lands if such land is outside the built-up part of the settlements. The purchase of such property by foreigners is prohibited, except as this property is the subject of inheritance. EU citizen with a temporary residence or permanent residence in the territory of Slovakia can purchase farmland if he/she has been using it at least for three years.

Thus foreign citizens can purchase without any restrictions, for example, apartments, commercial premises, dwelling-houses with gardens or even any ground inside the settlement.

 

Real estate expenses in Slovakia

In addition to tax and real estate value there is also the cost of related or additional services and service charge. It is referred to such costs as gas, water, electricity, telephone, Internet payments, property management company fee and others. Gas and electricity are the most considerable expenses.

As gas supply in Slovakia is no longer the monopoly, there are several gas suppliers on the market. Monopoly for the industry was canceled in 2006 and for private consumers – in 2011. The largest supplier is a former monopolist – the company Slovenský plynárenský priemysel a.s. (SPP), and its market share for manufacturers is 66%. There are 20 alternative suppliers, 9 of which supply gas to households. An important innovation is that the cost of gas is measured in kilowatt-hours since 2008, not in cubic meters, as a result the calculation is slightly complicated, but the comparison between gas cost, for example, and electricity is facilitated.

The gas cost according to SPP tariffs for households (in Euros):

  D1 D2 D3 D4
Fixed monthly rate 2.11 4.98 7.75 35.93
The cost of kWh 0.0646 0.0481 0.0462 0.0570

There were three traditional government suppliers on the electricity market: ZSE Energia, SSE and VSE, which have divided the region of Slovakia into three parts: west, center and east, and each of them was a monopoly in its territory. Demonopolization of electricity supply took place a few years earlier than in the case of gas, and nowadays 20 companies are engaged in electricity supply. The share of three former monopolists is 51%. Prices vary by region of Slovakia, and depend on the time, as the electricity at night often costs less than in the day time. In contrast to the gas cost, fixed monthly payment and the cost of kWh contains several expense items, such as electricity supply and distribution, the fee for electricity loss, for power supply system maintenance, for system services, deductions to the nuclear fund, fixed payment for the use of electric meter.

As an example of electricity cost in Slovakia, considering all partial expenses, the total cost of kWh is 0.124129 EUR with a fixed monthly payment in the amount of 5.87592 EUR. This is the tariff DD2 in ZSE Energia, a.s., which is the most appropriate for households that do not use electricity for heating.

The cost of water because of its specific nature is defined by law and consists of three parts:

  • Production and supply of drinking water by public water supply,
  • Distribution of drinking water by public water supply,
  • Elimination and treatment of sewage by public sewers.
The cost of water in 2014 in the two biggest cities in Slovakia (in cubic meters):
  Bratislava Kosice
Production and delivery 1.1231 1.5720
Distribution 0.7856 1.0800
Elimination and treatment of sewage 1.1059 0.9499

Gas, water and electricity are paid monthly in Slovakia by way of similar advance payments, normally using bank transfer or using the collection when the supplier withdraws necessary amount from an account. Once a year there is a recalculation, as a result it is required to make additional payment for used water, gas and electricity or overpayment amount will be returned.

Telephone service, cable television and Internet cost have been declining annually and there are a large number of providers on the market. In this regard, it is worth noting one distinction from the CIS countries, namely the fact that there are no and there never have been free local calls from a landline phone in Slovakia, and nowadays many consumers abandon landline phone, using only a cell phone. In the cities, people often connect to the telephone, cable TV and Internet simultaneously (service is called triple play) and the total cost is about 30 EUR per month, and if you conclude the contract for a longer period, mostly, for 2 years, the cost drops to 15-20 EUR.

In the case of multi-storey building (highrise) the household could be run by one of the dwellers or, more often, by property management companies, all of which are private. They decide the issue regarding the renovation and other questions. Their services do not cost much, usually around 10 EUR per month for an apartment. Having bought an apartment, the new owner under the law automatically is joined a contract, as a household could be run only by one company. In addition, at the meetings the dwellers fix by themselves, for example, the size of payments to the complete overhaul fund, decide how to use the accumulated funds, as well as may decide to change the property management company. Payment for management company servise is made on a monthly basis and includes water, heating payments (in case of district heating) and many other small fees, such as deratization, desinsection, disinfection, elevator repairs, lighting, heating and public territories cleaning, rubbish removal, pavement cleaning etc.

All payments related to the apartment are the owner’s obligations. It means that if you buy an apartment in Slovakia you do not buy a pig in a poke with all hidden debts as these debts remain with the former owner.



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