Bratislava Property Overlooked ?
After a hearty meal of Slovak fare (vegetarians be warned this is meat and 2 veg territory), we make our way back to Brandon’s place, a 3-bed newly reformed atico apartment at the top of a stunning mansion house, located a side street or two away from the main centre. Brandon searched high and low for the right place to call home; he found it eventually and now rents this place for around 800 €/pcm. Whilst this of course is at the top end of the rental market, both property purchase and rental prices in Bratislava are on the up as Slovakia’s economy steadily continues to grow and increased jobs and subsequent rising incomes underpin demand for rental property and ultimately home ownership.
New build developments in Bratislava are clearly underway with major projects taking shape along the riverbank and under construction in the main square, however I’m told it’s been a long time in the making so far.
The Bratislava property market is set to receive a much needed injection of both commercial and residential housing stock with industrial parks, office developments and new build apartments being planned throughout the city centre.
Following the break-up of Czechoslovakia, Slovakia, ideally located in Central Europe, has one of the fastest-growing economies in the region and was nominated by the World Bank in 2004 as having the most rapidly improving investment climate globally. It is one of the successful transitional countries in Eastern Europe largely boosted by a strong package of political and economic reforms with its infamous flat rate tax of 19% on income, corporate profits and consumption since 2004.
The city of Bratislava today, acts as the main force behind economic growth in Slovakia, being the main administrative centre of Slovakia and a significant industrial, cultural and historical centre with a cluster of universities to boot, building up a student population of 56,000. Interestingly, there are nearly 30,000 more women in Bratislava than men to which one might attribute much of the city’s ‘efficient’ growth ! Bratislava city also has a strong trade and service sector and is an important transport junction within Central and Eastern Europe given its proximity to Austria, The Czech Republic, Poland, Ukraine and Hungary.
Slovakian property investment is not limited to its capital Bratislava with strong property interest offering excellent conditions for growth in Slovakia’s Tatras mountain regions where letting revolves predominately around the ski resorts however since foreign purchases were first allowed in 2004, real estate investments in Bratislava have continued at a stable and predictable pace and naturally in the capital growth and demand are above the national and regional averages. Capital appreciation in Bratislava stands between 10 and 15% in the first half of 2007 according to statistics of National Real Estate Association. In 2005 around 15,000 construction permits were issued, up from the previous year’s 5,000 however in realistic terms just 7.5 new flats per 1,000 inhabitants were built in 2005 and today, construction stands at nearly half of what was being built in the 1970’s. The absence of any new construction in the 10 years post-communism has lead to this gap in construction creating substantial local demand as demonstrated by the volume of increasing demand for mortgage home loans in Slovakia year on year, despite Slovakia having the second lowest volume of loans in the EU and the availability of 100% mortgages for which base lending interest rates currently remain on hold at 4.25%.
With only 1% of the Bratislava property market made up of foreigner property buyers, this lesser dependence on international funds should be a key factor in maintaining the buoyancy of Bratislava’s real estate market and should hold it in good stead for strong returns on future capital growth. Since much of the existing real estate harks back to communist days, property on the whole is unkempt, lacking in modern facilities and in need of repair hence the emphasis today is on high specification, well constructed, new build property enjoying an attractive location close to the city centre which in turn will guard their value in the longer term.
The best gauge of Bratislava’s prospects are its people who in a recent Urban Audit Perception Survey 
which measures the overall contentment of a city’s own residents indicate a city on the up with Bratislava placing 49th out of 75 European cities rating the satisfaction of living in their city. Overall Bratislavans are very positive about the opportunities for finding a job ranking 7th after residents of Prague, Copenhagen and Dublin where more than 70% of those who replied, agreed “it is easy to find a good job” but it seems this a perquisite given that when asked to agree with the statement “it is easy to find a good quality house at a reasonable price” of the thirteen cities where more than 90% of the respondents disagree, Bratislava was one of the nine capitals sitting alongside the likes of Paris, Luxembourg, Dublin and interestingly Bucharest.
This again points to a notable lack of good housing stock couple that with third highest rental yields in Europe at 10% and capital appreciation estimated at about 15%, Bratislava looks to be a hot property prospect. 95% of properties in Bratislava are owner-occupied so there is a shortage of rental property but when you consider that against the fact that only 31% of Slovaks own their own property, the investment property market offers huge potential especially as increasingly many Austrians are also now taking advantage of the lower cost of living and choosing to live in Bratislava and commute to work in Vienna.
Another sure-fire way of getting to grips with a city’s personality traits is through its night life. Often a good liquidity indicator of a city’s residents, people with money like to be entertained and a healthier than average presence of chic bars, wide ranging choice of eateries is the best rule of thumb for a city enjoying prosperity.
A night out in Bratislava takes you through St Michael’s Gate where the cobbled streets are the backdrop to a medley of alfresco dining establishments and chic open-air bars blasting the latest euro 
tunes. These places can only flourish if city residents have money to spend and its abundantly clear Bratislava’s youth are out to have a good time with money in their pockets. A bottle of wine sets you back 10 euros a bottle and a beer around 75 cents which you can enjoy with a decent meal for two for about 25 euros so not as dirt cheap as you’d expect but still your pounds go that little bit further. Just a fragment of Bratislava of old, the ‘Stare Mesto’ Bratislava is like miniatureville jammed with pocketsize patios, mini Mozart houses and petite palaces with Renaissance frontages and the rattle of the tram system is never far away, not that you should tire from walking round this petite city.
After sampling the nightlife of ‘Partyslava’ as the city is reluctantly being renamed, its time to sample Bratislava’s daylight offerings. Having travelled throughout Europe, I find you can often get a feeling that some European cities could almost be a hybrid of another, a sprawling mass of high rise edifices, the token cathedral and obligatory shopping malls selling a standardised mix of European brands. Brastislava in time, may sway towards this look but at present is it a heady blend of amazing architectural sights, attractive through-fares and despite the city being the size of a postage stamp, it offers an eclectic choice of places to see and things to do.
Courtesy of Brandon, we first make our way to the heart-stoppingly beautiful Blue Church, in the midst of receiving a touch-up but jaw dropping all the while and then head on to a whistle-stop tour of the principal must-sees and eventually make our way to the majestic river front having crossed the Old Bridge, we wander through the spacious greenery of Jan Kral park, Europe’s first public park and find ourselves on Bratislava’s newly opened City Beach at Tyrsovo Embankment on the right-hand bank of the Danube river.
Operating daily from June to September, the concept borrowed from the infamous Paris plage offer punters a bar serving drinks all day, beach beds, beach volleyball, badminton, football and a petanca course, not to mention the token bright pink deckchairs courtesy of T-Com Fiesta, a street festival sponsored by mobile operator T-Mobile Slovensko. As at 31 December 2006 , as T-Mobile Slovensko continues expanding its customer base, it served 2,201,096 customers and with capital expenditures in 2006 reaching almost SKK 3.3bn confirms its leading position in mobile broadband in the past year.
Supping a Vinea, a wine flavoured soft drink invented locally and made by Víno Nitra, one of the top three wine producers in Slovakia, whilst watching Bratislavan youngsters top up their tan, it hits you once again how modern this city already is, demonstrating our preconceptions of Eastern European squalor clearly forget to take into account that in the past ten years whilst we’ve all been advancing in modern Britain so too have the likes of Bratislava.
The river front of course is Bratislava’s prime asset and Brandon tells us it’s even possible to cycle right along the banks of the Danube all the way to Vienna with rather fortunate luxury of passing a few wineries en route. Naturally, views along this infamous waterway will be prized territory and already key riverside real estate plots along the banks have been snapped up with epic projects planned to build riverfront developments akin to those of Chelsea or Docklands.
In addition to the riverside zone, the most populous areas noted in a recent census were districts 5 and 2 with other popular residential areas in the boroughs of Petrzalka, Nove Mesto and Ruzinov. Typically, properties are listed by number of rooms similar to France and prices for a standard 100sqm apartment start from around 130,000 Euros which could rent on average for around 1100 €/pcm. The second hand property market moves fast given the lack of supply and properties usually sell with a few days. Two-bed apartments are popular with 20 somethings who make up the main share of buyers in the Bratislava real estate market today. The buying process is straightforward and similar to that in Europe with a deposit, pre-purchase contract signed subject to survey upon which deed, money and contracts are signed and sealed.
Very much a sporting city, Bratislava has already hosted several high profile sporting events along with a host of cultural offerings. This year the women’s International Basketball Federation’s World Championships will be played here and a new arena is being planned for 2011 when Bratislava will host the Men’s Ice Hockey World Championships and back in 2005, it hosted the Davis Cup final and has even produced tennis ace former number one Martina Hingis. Other infamous Slovakians include Andy Warhol and Ivan Reitman of Ghostbusters fame.
Bratislava is well on its way to becoming a premier city in Europe, having already attracted 636,298 visitors last year, it unusually remains freshly-minted destination that almost nobody else we’ve met has been to yet. This is partly due to a lack of accommodation with just 43 hotels and 9,648 beds in total, this sector has room for good growth especially given Bratislava airport is soon to receive a 100m investment in order to attract more traffic.
With Ryanair and Skyeurope already flying there from the UK’s main airports and new routes connecting into Europe already on the cards coupled with strong rail and road links a locally driven-property market and sights to envy some of Europe’s best cultural offerings, is it any wonder Hans Christian Andersen named it “the most beautiful city in Europe” and Steve Forbes believes the Slovak Republic to be the world’s next Hong Kong or Ireland ? Maybe just maybe, the Bratislava property market has been cleanly overlooked.
