News Article Bencont Bratislava report residential Slovakia
by Property Forum | Residential

As early as 2022, when banks started raising mortgage prices, the fewest apartments in new buildings have been sold in Bratislava since the economic crisis. The 2023 market figures are not optimistic either, reports.

Recovery could come this year after mortgages become cheaper, says Rudolf Bruchánik, an analyst at Bencont Investments. Just 773 new flats were sold in the capital last year, just a quarter of what was common between 2018 and 2021 when mortgages were the cheapest. Compared to the strongest year of 2017, last year's sale of new buildings in Bratislava was only at the level of 15%. At the same time, the share of apartments that were sold only after completion increased. So-called "paper sales" still make up two-thirds of sold apartments, but between 2015 and 2022 it was significantly more. Of the ten apartments sold, eight or nine were just being built or planned to be built at the time of the sale.

According to Rudolf Bruchánik, the reduced demand was not reflected in the price of new apartments. For the last year and a half, prices have stagnated because developers have adapted to weak demand and withdrawn some projects from sale, so the supply was weak. This year, the analyst expects a slight revival of interest in new apartments in the capital. It is mainly based on the assumption that banks will translate the expected reduction in interest rates of the European Central Bank into mortgage rates. And loans will be more accessible to people.

"If that didn't happen and in Slovakia, due to stagnant interest rates we would have a similar year to the previous one, some developers wouldn't have to endure that anymore," Bruchánik says. He considers such a scenario to be less likely, estimating that banks will reduce rates this year by a quarter or even three-quarters of a percentage point. Analysts of Slovak banks said in a survey of Denník E that after the turn in monetary policy, the development of rates in the eurozone and Slovakia may be divided. While mortgages will be cheaper in the eurozone, they may stagnate or even become more expensive here. However, according to Bruchánik, a look at the housing market in Prague is also important for estimating future developments. It is similar to the one in Bratislava, for example, with long permitting procedures. According to him, the Bratislava market has been shifted by roughly a year and a half compared to Prague: "In Prague, the market has been coming to life for the last few quarters, something similar is waiting for Bratislava."