The real estate market in Bratislava may run into an insufficient supply of apartments, analysts warn

Since the second quarter of 2017, the number of vacant apartments in the capital has dropped from 4840 to 3646 by now, or 25%.

In the first quarter of 2018, a strong demand for more than 1,000 flats continued on the Bratislava real estate market. The total offer fell from 3952 vacant apartments to 3646 and was accompanied by a sharp price increase in free flats.

Bencont Investments analysts point out that there may be a situation where the Bratislava real estate market will run into an insufficient supply of apartments.

The offer of new buildings on the real estate market in Bratislava was, according to analysts, at the end of March this year 3646 apartments within 125 residential projects.

The biggest new project was Sputnik in Ružinov and new stages of the Stein 2 project in the Old Town. The new housing offer, however, was insufficient to maintain the same level of free apartments at the current sale, and as a result, the offer dropped by almost 10 percent.

The offer of apartments continues

Analysts point out that this is the third downside, with the number of vacant apartments in the capital from 4840 to 3646 by the second quarter of 2017, or 25%.

In particular, the third district is the downside, where many new projects are being launched in 2016 and 2017, which are gradually being sold out and new projects are being replaced only rarely, analysts say.

The unit price of vacant flats reached EUR 2,687.93 per square meter (m2), including value added tax (VAT). This is a year-on-year increase of 6.6 percent and inter-quarter prices rose by 3.2 percent.

Analysts say that the growth is mainly the third, fourth and fifth Bratislava districts, where they sold off cheaply flats for the cost of already offered apartments.

Sales of new buildings in the first quarter of 2018 reached 1007 apartments. Most apartments were sold in the second district of Bratislava and Petržalka, while the best-selling project in Bratislava was Slnečnice, which accounted for 18.5% of the total sales of new buildings.

The average price of sold apartments reached € 2551.42 per sq m including VAT. In general, people generally prefer to have smaller and cheaper flats.

Housing can afford more and more people

“The affordability of housing (real estate prices in terms of wages) is currently at the highest level in Slovakia’s history, and more and more people can afford housing. Interest rates on mortgages, which are currently at an average level of about 1.7 percent, are also very important This means significantly lower installments for mortgages, “said Bencont Investments senior analyst Matúš Jančura, adding that the situation on the labor market is also favorable and high demand for real estate is therefore natural.

However, demand may limit, for example, the new rules of the National Bank of Slovakia (NBS) to provide loans to banks. Under a rule that will come into effect from July 2018, the maximum credit indebtedness of the population will be 8 times its average annual net income.

Another possibility of a potential drop in demand may, according to Jančura, be increasingly limited in housing supply. “From this point of view, we can expect further price growth in Bratislava in the near future, but we do not expect it to be higher than 1-1.5 percent median quarter, or three to six percent year-on-year,” he added.

https://finweb.hnonline.sk/ekonomika/1727163-realitny-trh-v-bratislave-moze-narazit-na-nedostatocnu-ponuku-bytov-varuju-analytici