Eastern Europe Property

Do you prefer a spacious detached home rather than a city apartment? You will love our stunning new chalets in the renowned tourist village of Liptovsky Trnovec. The beautifully designed chalet complex includes a reception, restaurant, bar and conference rooms, and benefits from an incredible location, walking distance from the popular Liptovska Mara lake as well as the Aquapark Tatralandia (the largest in Central Europe). Jasna is easily reached by a short ski-bus ride.

These amazing homes are an ideal holiday-let opportunity with excellent yields and proven rental success (by a local travel agency). The chalets have proved very popular and only the last three are now available.

If you are looking for an extremely affordable, high standard new home in one of Slovakia’s most famous holiday hotspots, just minutes away from the country’s top attractions, you don’t want to miss out on this one… Spacious (150 m2) 2-story, 3 bedroom, 2 bathroom homes with a large land plot (garden) and parking come at just 80k GBP – including VAT!

If you are interested in securing one of these exciting investment & holiday properties, don’t wait and contact us now. Should you be looking for a different property or area, let us know. We deal with residential (new and classic) and commercial properties in most regions of Slovakia.

Call: +44 (0)207 152 4014

Slovakia Investment Property have a fantastic 3 bed apartment available in a high quality new development in the historic centre of Liptovsky Mikulas, the gateway town to the Low Tatras.

Jasna, the largest and best ski resort in Central Eastern Europe, as well as Slovakia’s top two most visited attractions – Aquapark Tatralandia and Thermal Park Besenova – are all just a few minutes away!

This highly popular development is fully sold-out (mainly to local buyers) and offers high standard at exceptionally low prices. In fact, lower than any other new development in Slovakia’s sought-after tourist regions.

The unbeatable value coupled with a fantastic location make this property a high-yielding buy- to-let opportunity as well as a great vacation home. Rental and management facilities are in place through a local travel agency.

This is the only chance to buy a new, spacious (108 m2) 3 bedroom apartment in Slovakia’s # 1 holiday region at prices 7-8 times lower than of a similar property in French or Swiss tourist centres. Or, if you want, at the price of a tiny flat in much less established Bulgarian mountain resorts.

There will not be any new development at similar rock-bottom prices in Slovak holiday regions either. In fact, prices of comparable new apartments are now 25-100% higher! If you want to secure this beautiful apartment, it comes at just 57k GBP including VAT, kitchen, and fantastic views onto the High and Low Tatras. Plus you can start receiving rental income as early as this winter!

Call : +44 (0)207 152 4014

While most individual foreign buyers look primarily for [tag]residential property[/tag] and [tag]buy-to-let [/tag]opportunities, investors, particularly those with larger amount of funds available, should not forget about other potentially highly profitable options. Apart from commercial property, land investment can offer excellent returns to the shrewd ones.

There are several strategies investors interested in [tag]Slovak land[/tag] deals can follow. Primarily they are: buying land for long term hold; buying large plot, connecting services, splitting into small parcels and selling off; buying to develop.

Buying for long term hold

As in most markets, land is increasing in value faster than any other type of property in [tag]Slovakia[/tag]. Naturally, it only applies to regions with good demand for land and property. Investors with large amount of cash at hand but unwilling to develop land may find a buy to hold option attractive.

If bought well (in high demand area, or area with growing future demand, and at a favourable m2 price), appreciation can represent 10-50% p.a., particularly in areas in and around Bratislava and other economic centres, as well as popular tourist centres.

A disadvantage of this strategy is the lack of any financing options – no Slovak bank will fund such purchase.

Buying to split and sell

A highly profitable (if done properly) short-term strategy pursued by local firms and increasingly several foreign investors is purchasing a significant land parcel (often 1 – 20+ ha), connecting services (water, sewage, electricity, etc), splitting into small plots and selling off to the end user, or possibly in a joint venture with a developer who will offer to build homes, whether catalogue-type or more exclusive individual designs.

The main condition here is to buy in an appropriate area and at a m2 price that allows for a safe margin on resale. Areas where such operations have frequently been done in recent years are almost exclusively in proximity of [tag]Bratislava[/tag]. Villages and satellite towns 5-15 km from the capital with demand for new family houses and land available for development present good opportunities. So do parts of Bratislava suitable and in demand for family house construction.

Once again the disadvantage is the difficulty in financing a land purchase in Slovakia. However, due to the short turnover period investors (who do not have all necessary cash) are usually able to arrange funds from another source.

Buying to develop

Naturally, development presents the most significant scope for profits. However, it also carries the highest risks, including in the planning process. While it varies depending on region and the respective local authority, planning in Slovakia is generally a very lenghty and bureaucratic process.

With over 70 institutions’ approval necessary before a building permit can be issued, it is of little surprise it often takes years for developers to obtain a permit. This is particularly true in Bratislava with the lack of a functioning master plan (the existing one being 30 years old) and many interests at stake.

Any possible newcomer will also need to expect tough competition from the many established local and few foreign developers (who have entered the market in recent years, often in partnership with an experienced local player).

The advantage of development is the ease of obtaining finance from local banks; Slovak banks offer the cheapest development financing in Central Europe. However, only developers with a track record and experience in the Slovak market will typically be able to benefit.
Main obstacles

No matter what is your plan for land investment in Slovakia, you will have to overcome two main obstacles that characterize the market.

Land in Slovakia is highly split (into a large number of small parcels) – a legacy of an inheritance system that had encouraged splitting each parcel among all heirs as well as allowing multiple owners of a parcel.

The resulting situation makes it extremely difficult to buy a larger land parcel; in most cases buying up several parcels is necessary, each of them typically having multiple owners. (In case of very large developments this often involves hundreds or even thousands of owners.) By law each of the owners have to agree on sale; the process is very time consuming, expensive, and frequently falls apart due to unwillingness to sell by some of the many owners, or because often some of them cannot be traced.

The second obstacle to successful land transactions is the high percentage of land with unidentified owners, again, an issue resulting from historic circumstances, confiscations, etc. Official statistics quote 238,000 hectares of such parcels in Slovakia today, the highest number being in Presov, Kosice and Banska Bystrica regions, lowest in the Bratislava region.

Prices

It is not possible to quote average land prices due to the many factors of influence, mainly location, size of parcel, possibility of use (type of construction), services, etc.

As a very general guide, building land prices range from 250-900 euro/m2 in sought-after areas of Bratislava (while smaller plots in top areas of BA I can top 1,300 euro/m2), with land in other parts of the capital, typically on the outskirts, coming at 120-180 euro/m2. Villages and satellite towns within 5-15 km of the capital see prices of typically 45-130 euro/m2.

Prices outside the Bratislava region vary hugely, with larger economic hubs in western Slovakia (Zilina, Trnava, Nitra, Trencin, etc) as well as parts of Kosice in the east boasting higher prices than the rest of the country.

Land in sought-after tourist resorts in particular in the proximity of ski resorts, aquaparks, etc, has seen high appreciation in recent years and ranges from 30-120 euro/m2.

Agricultural and forest land

Slovakia has 4.4 million hectares of agricultural and forest land. Slovaks’ interest in agricultural land is very low, in part due to low profitability of cultivation. Owners frequently let land unused or rent it to agricultural communes. However, rents are very low (10-30 euro/hectare) and often not paid at all.

Prices of agricultural land in Slovakia are at the very bottom of EU prices. As an example, average price in Slovakia was 880 euro/hectare, while in Czech republic 1,300/ha, Germany 9,400 euro/ha, in the UK and Ireland 11,600 and 12,700 euro/ha, in the Netherlands 34,450 euro/ha and in Luxembourg 53,300 euro/ha (Eurostat figures, 2003).

So what does this mean for an investor?

First of all, it is important to note agricultural land is not building land, construction is not possible, and in most cases never will be.

Second, foreign individuals and companies are not permitted to purchase agricultural and forest land in Slovakia until 2011. (The only exception being EU citizens resident in Slovakia who have been cultivating the land for at least 3 years prior to purchase.)

In spite of that, there has been some interest from mainly Austrian buyers who have (unofficially) beein purchasing land in the Bratislava region through local persons or by way of future purchase contracts and option agreements. Interest in other regions is significantly lower.

Forest and agricultural land around Bratislava is typically sold at 3,400-8,000 euro/hectare (forests) and up to 25,000-100,000 euro/hectare (land). At the higher end of the price range speculation on future exclusion from the agricultural fund often plays a role.

Once restrictions are lifted in 2011, foreign buyers are likely to be the main factor in reviving the sleeping agricultural land market in Slovakia. A land reform to offer solution for the problems of highly splitted parcels and in part intransparent ownership structure is also urgently needed to kickstart the market.

For more info: http://www.slovakiainvestmentproperty.com

Slovakia’s economy grew by a record 6.7% in QII 2006. Domestic consumption also continues to grow fast, on the back of higher disposable incomes. Retail sales increased by 8.8% y/y in July, compared to just 2.5% y/y in the euro-zone.

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The credit register, established in October 2004 by Slovak Banking Credit Bureau (a joint operation of three of the country’s largest banks Slovenska Sporitelna, Tatra banka, VUB) will soon conclude its second year. And it has proven itself; initially only registering data from its three founder banks, in 2005 and 2006 virtually all of Slovakia’s banking institutions have joined to exchange information on clients. Borrowers who have been late on payments are consequently starting to have problems in obtaining further loans.

A similar register will be starting in 2007, this time covering information on clients of non-banking institutions (incl. leasing companies, loan companies, utility suppliers, telecoms).

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Bratislava’s M.R.Stefanik Airport will remain in state hands; in spite of winning the privatization, TwoOne consortium will not be taking over afterall. TwoOne, made up of Vienna Airport, Raiffeisen Bank and Slovak investment group Penta, has, in February 2006, signed an agreement on buying a 66% stake, pending approval of Slovakia’s Anti-monopoly Office. The Office’s decision came in negative in view of potential disadvantages of Bratislava airport being sold to its main competitor (Vienna airport).

The new Slovak government, in line with its policy of not privatizing remaining state assets, has consequently cancelled the privatization rather than inviting the tender’s second bidder. Although significant investments into extension of the fast growing M.R.Stefanik Airport are planned, it is expected funds will be available in spite of the U-turn on privatization and without an outside investor.

Bratislava airport has seen unprecedented growth in the last 3 years, with passenger numbers nearly doubling y/y. In the first 7 months of this year 1.5 million passengers have used the airport. The annual figure is expected to be over 2 million – five times more than experts predicted five years ago.

The terminal, projected accordingly for a capacity of 300,000 passengers a year, is no longer suitable for the fast expanding airport. A new departure terminal is awaiting planning approval, construction could start in early/mid 2007. However, it is already known that the new terminal (cost of 100 mil euro) will only provide a solution until 2010, when its capacity once again falls short of the forecasted 4.5-5 million passengers. Future plans count with a new terminal for 10 million passengers.

This summer a new arrival hall was opened, doubling arrivals capacity and setting up passenger processing facilities in line with the Schengen Agreement. Late this year construction will start on a new parking house (capacity of 1,200 cars).

With Bratislava’s ever increasing popularity among foreign visitors, even current excellent forecasts for the airport may, in a few years time, prove to have been too cautious. (This year Bratislava has again seen an 11% growth in visitor numbers – far above most European cities, including Vienna with its 2% growth y/y.)

For more information visit: http://www.slovakiainvestmentproperty.com

Over the last year a significant new trend has started to be evident in the Slovak market. While until recently the focus of most investors has been on city properties, in search of longer term letting to companies and professionals, today increasingly many are exploring previously untapped opportunities in some of Slovakia’s top tourist locations.

The benefits are promising: growing holiday-let returns as well as exceptional capital growth potential. Not to mention, of course, the joys of owning a holiday home in one of the most beautiful corners of Europe.

Prior to attracting foreign buyers, Slovakia’s main tourist and ski centres have already seen a huge surge in popularity among local second home buyers. Owning a holiday home in the mountains has, over the last year or two, increasingly become a matter of not only convenience but also prestige.

Responding to the demand from mostly Bratislava families, several new developments have been offered to holiday home buyers in the last 15 months. They have two things in common: extremely fast sales (several dozens of units often selling out in a matter of a few weeks) and higher and higher prices.

Although prices of some of the newest homes in holiday regions already reached top prices in central Bratislava, developers are optimistic. It seems they have good reasons to be.

First, they bank on the short supply. Due to Slovakia’s strict protection rules for national park areas (covering much of the mountain & ski regions) new developments in the country’s most popular holiday destinations are (and will continue to be) rare. Second, there will always be a sufficient number of wealthier local buyers willing to pay up to own a prestige home in their favourite Slovak winter (or summer) holiday spot.

Among the several popular mountain ranges in Slovakia the High and Low Tatras and Velka and Mala Fatra are the most well known. (Central Slovakia and centre-north.)

The Low Tatras feature the best skiing and ski resorts, most popular being Jasna and Donovaly (Jasna is the largest & best ski centre in Central Eastern Europe). The best resort in the High Tatras is Strbske Pleso with its beautiful scenery but relatively limited size.

Holiday letting

If one is to have any chance of letting a property to holiday makers, it needs to be in or very close to an established and popular ski resort or main tourist centre. Some areas, such as the Low and High Tatras, have also the advantage of being visited in both winter and summer which is not the case in other ski centres such as Velka Raca (near Zilina).

Occupancy in dual season resorts is consequently much higher than in any other area of Slovakia, and properties can achieve up to 30-50% annual occupancy provided located in one of the top tourism spots. The farther away the less suitable for letting (more than 10-15 minutes drive or ski bus ride will generally dramatically lower rental appeal of a property).

Resorts with winter season only will rarely suit for letting (if any profit is to be achieved) as annual occupancy will be as low as – or lower than – 20%.

One needs to consider rates are still low in Slovak tourist centres (SKK 250-800/night/bed depending on season and quality, up to SKK 1,200 for high standard accomodation in top season – Year End/New Year). Above rates apply to self-contained chalets, homes, apartments in top tourist areas close to all attractions and facilities.

This however means that only buying a property at relatively low m2 (sq meter) price will give an investor a return on rental. In the best of circumstances a 4-8% NET yield is achievable (although relatively rare). The very steep prices of a majority of the new projects make them suitable for second home buyers looking for own use rather than rental returns. Most of the new holiday resort properties currently sell at GBP 900 – 1,400/m2 (incl. VAT) and will barely yield 1% net.

It is still possible to buy at a reasonable price, making holiday rentals a profitable option. An older home or cottage can also prove a good holiday-let, however, a location close to the ski centres and other attractions is a must if it is to appeal to tourists. The good news is, rates for tourist accomodation in main holiday centres are going up year after year (though not as fast as purchase prices in such areas).

Properties can be let to holiday makers through Slovak travel agencies; there are several that specialize in self-contained accomodation for winter & summer holidays. For the more hands-on owners, running a website or using one of the international holiday rental sites can prove worthwhile.

Important to keep in mind is travel agents will only do the letting (booking); the owner/investor has to arrange cleaning, washing, check-in/out service. In some of the new developments of chalets or apartments such services can be provided (at a fee) by the developer or administrator. In all other cases a common solution is finding a local to perform such tasks (often at comparatively low fees).

While holiday letting has its particularities and several issues need to be considered with care, the results (provided one gets it right) can be extremely gratifying and often more profitable than long term rental. This is increasingly proving to be true in some of Slovakia’s magnificient mountain resorts.

Source: http://www.slovakiainvestmentproperty.com

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Knight Frank, international estate agency and property consultancy with offices in 30 countries on 5 continents, predicts Slovakia and Slovenia to be the Eastern European property hotspots in the year ahead. Liam Bailey, head of Knight Frank Residential Research considers them “two countries with the best potential for further growth”.

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According to Fitch Ratings’ latest analysis, Slovakia should be able to adopt euro in 2009, as planned. Meanwhile, the prospects for the rest of Central Europe joining the single currency have worsened over the last 12 months. Fitch does not see chances for the Czech republic to join before 2011, Poland before 2012 and Hungary by 2014 at earliest. Estonia is expected to be able to adopt euro by 2009/10.

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Bratislava will soon benefit from yet more affordable flights. Wizzair, one of Central Europe’s largest low- cost carriers, will make the city one of its operating bases, launching flights to 13 destinations from Bratislava airport in early 2007 – including London and Cork (Ireland). Bratislava airport is already served by Sky Europe, Ryanair, EasyJet, as well as a number of full-service airlines.

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In spite of rising interest rates mortgages are continuing to see increasing popularity among Slovaks. By 31 June 2006 Slovak banks had provided mortgages in the total sum of SKK 77.3 billion (GBP 1.4 billion). In the first 6 months of 2006 alone, Slovaks took out mortgages of SKK 10.4 billion – an 18.1% increase y/y.

Mortgages continue being affordable despite rates being at their highest since mid 2004 (after three subsequent base rate increases this year mortgage rates range from 6-7%+). Althouh a further rate hike is expected before the end of the year, the industry predicts the mortgage growth to continue, curbed by strong ownership desire of Slovak population and increasing disposable incomes.

Meanwhile, the new government plans to reintroduce the abolished mortgage bonification for young Slovaks. Anyone under the age of 35 and (income) not higher than 1.3 times average income in Slovakia will be able to take advantage of a subsidized mortgage rate. The aim is to enable those on lower incomes and in economically less developed regions to become a home owner.

Source: www.slovakiainvestmentproperty.com

BRATISLAVA

19 new apartments in a small development in a fantastic location bordering on the city centre of Bratislava – just 5 minutes walk to the Old Town!

Not only does this central location offer highest demand from both tenants and buyers, it will also see further appreciation due to the redevelopment of the main bus terminal into a superb hotel/shopping/terminal complex, and the construction (underway) of the massive new City Business Centre…just 300 yards from our apartments!

With unbeatable prices of approx. 1,200 GBP/m2 (incl. VAT) these 1 and 2 bedroom apartments will sell extremely fast.

LIPTOV

Our second deal will appeal to both investors and those looking for a beautiful and exclusive holiday home in Slovakia’s most visited tourism hotspot.

You will have a rare opportunity to snap up one of just 9 amazing new chalets, in a breathtaking location near the popular Liptovska Mara lake, within walking distance of Aquapark Tatralandia (Slovakia’s # 1 tourist attraction), a mere 2 km from the centre of the historic Liptovsky Mikulas town and just 10 minutes drive from Jasna – Central Europe’s largest and best ski resort!

Beautifully designed and built of brick, stone and wood, these spacious chalets start at just 80,000 GBP (2 bed, 2 bath house over 2 floors) – including a large land plot and VAT! Rental facilities are in place (holiday lets).

In case you haven’t done so yet, you can register your interest for either opportunity by sending an email to:
info@slovakiainvestmentproperty.com

Information packs will be sent out 7 days prior to release.

Slovakia will receive 110 million euro in 2007- 13 from EU’s Regional Development Fund, for revitalization of its communist era housing estates. The government estimates the funds to allow rehabilitation of 50,000 panel block flats.

At present an estimated 650,000 units need revitalization. Rehabilitation of communist housing blocks will require some 11 billion euro over the next 30 years. Currently Slovakia manages to repair just 8,000 units a year.

The rehabilitation funds will be provided to municipalities and are allocated for structural and insulation problems, repairs of communal parts of buildings, technical and electrical installations, as well as, in some cases, creation of community centres, playgrounds, etc, in order to prevent social degeneration of settlements.

The largest share of the funds will go to the most needy communities with low purchasing power and high unemployment. Bratislava is excluded from any EU funding due to high GDP, which in this particular case is unfortunate as the capital is home to most of Slovakia’s communist-era panel blocks.

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Slovakia’s GDP grew by 6.3% y/y in the first quarter of 2006. The foreign trade deficit has been further decreased and the foreign trade balance has, according to NBS (National Bank of Slovakia) analysts, a positive outlook.

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After two rate hikes in February and May, National Bank of Slovakia (NBS) increased the base rate by another 50bp in late July. The hike has been expected by analysts and is a measure to curb inflation and prop up the slovak koruna that has been weakening since March under influence of the volatile Central European currencies (particularly the polish zloty) as well as immediately before and after Slovak elections.

Slovakia has to stay within ERM II (EU’s tight exchange rate mechanism) for two years before being allowed to join the euro, therefore NBS is expected to keep stepping in to defend the koruna when necessary (to strenghten/weaken it).

The base rate currently stands at 4.5% p.a.

Article supplied by: www.slovakiainvestmentproperty.com