Channel Four a place in the Sun
Statistics specially commissioned from a leading accountancy firm have predicted how quickly countries’ economies are expected to grow. Amanda’s ranking formula takes into account where house prices are over and undervalued at the moment, and adds in how much money you could make from renting out a property.
What you end up with is one way of predicting how big a return you could see on your property investment in each country over the next 10 years. The top 20 best performing countries have made the chart.
Voted Number 7
According to the EU Slovakia has the fastest growing economy in Central Europe. This newly joined EU member has a huge shortage of properties, meaning the existing ones are soaring in value. The old town of Bratislava (dubbed a mini-Prague) is ripe for investment and rural properties are going for a song - £35,000 will buy you a new chalet in the Tatra mountains. Calculated 326% return
One of the Fastest growing markets
The Slovak real estate market has experienced enormous development over the last few years. The fast growing economy and political and social stability brought a real boom of property prices and land investment opportunities, which have been rising steadily over the last few years. However, Slovakia is still the most undervalued European country, with price levels well below other comparable countries. Most experts expect prices to continue to climb, predicting a 10 - 15% annual growth in the next 3 - 5 years.
Slovaks have a very strong domestic demand
Slovakia real estate market has a lot to offer investors it is already in the EU. Although a significant part of commercial land is owned by foreigners (mostly German, Austrian and US property funds as well as Irish and Italian investors), Slovakia's residential market is driven largely by domestic demand. There is huge demand from the local Slovak population, in particular since the first mortgage finance products were introduced to the market a few years ago. The mortgage market is developing rapidly and allowing more and more Slovaks to purchase their homes.
Short supply
Slovakia, has a massive shortage of housing stock. At 309 per 1,000 inhabitants, the number of dwellings in Slovakia falls well below the EU average of 450 dwellings per 1,000. As such, it is quite usual for several generations of one family to live in the same unit which is why many of the new build properties are gone as soon as they hit the market. Much of the housing is represented by communist built concrete panel blocks. Although some have been undergoing renovation, many are run down and of poor standard. With increasing wealth the fastest GDP growth rate across Europe and growing purchasing power, Slovaks are keen on new higher standard housing. In particular, there is a huge demand for new built flats and building land.
Insufficient construction rates
Compared to other EU countries, Slovakia lags considerably behind in housing construction. The year-on-year increase in housing in Slovakia is only 1.2 dwellings per 1,000 inhabitants. The shortage of properties and massive domestic demand will continue to push property prices up significantly, particularly prices for new built flats in popular regions. Experts say real estate in Slovakia is in its infancy and will continue to offer substantial capital growth and excellent returns over the next years plus the will be entering into the EURO at the end of 2008.
Ski loges and land purchase = Tourism Rental
With the enormous demand for ski holiday accommodation borne out by all the investment in Bulgaria. Slovakia is the best kept secret in Europe all ready in the EU with some of the best slopes in Europe and the supporting infer structure in place already.In areas such as Jasna and Liptovsky Mikulas. Tourism has grown by 40% in the last year alone and is only set to continue when the UK skiers find this destination and just how easy it is to get there from airports in the UK. Ski Loges and land are seen by many experts as the best option for capital growth and rental opportunities, especially in the Tatra Mountains.
Rental market
While in the Czech Republic many tenants still live in apartments with regulated rents, in Slovakia rent controls have been abolished (very few exceptions apply, for some tenancies that started before 1989). There are two main categories of tenants in Slovakia – foreign expat tenants and companies; and local, mostly student and lower income workers. The first category has, since mid 1990s, created a very strong rental market in Bratislava (with strongest demand for good quality property in Bratislava I, Old Town) and newly also in locations such as Trnava and Zilina (areas receiving large foreign investments). Rental yields for quality apartments in Bratislava are typically 6-8% (up to 10% in Trnava). Low income tenants and students will typically rent cheap, often communist built apartments, frequently sharing a property. While in many EU countries as much as 50% of population live in rented accommodation, in Slovakia this is only 6%. Although it is difficult to predict the development of the local rental market, the tendency towards owner-occupancy has been very strong in Slovakia, and with increased availability of (cheap) mortgages, Slovak middle class population always opts for buying rather than renting property.
Foreign ownership
The Slovak property market opened doors to foreigners on
1 May 2004. As opposed to restrictions on purchase in most of the other new EU members, all foreign citizens who wish to buy property or land (except arable and forest land) in Slovakia are able to do so directly, without having to set up a company and have a local legal signatory.
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