House prices globally are presently growing in their sharpest rate since prior to the financial crisis of 2008, with Slovakia seeing your fourth fastest increase among 55 countries contained in the latest Global House Price Index published by the real estate agency Knight Frank.
Prices globally grew 7.3 per cent on average in the first quarter of 2022, the strongest pace of growth since the fourth quarter of 2006.
The strongest growth was at Turkey, up 32 percent, accompanied by Nz at 22.1 percent. Third was Luxembourg with 16.6 per cent and then Slovakia’s 15.5 per cent. Fifth place went to the US with development of 13.2 percent, its most critical since December 2005.
Elsewhere within the Visegrád region, price growth in Czechia and Poland was around nine percent as well as in Hungary just 1.8 percent.
Residential property prices in the Slovak capital Bratislava jumped throughout the Covid-19 pandemic, driven up by strong demand, low supply of residential real estate at inexpensive price points, and cheap mortgages.
“Mortgage rates of interest are still at record lows, and thus demand is significantly greater than what is, at the moment, the lowest level historically of flat supply [in Bratislava],” Daniela Danihel Rázová, director from the property agency Bond Reality, told The Slovak Spectator. “The best way to change this is to begin creating a large amount of flats.”
However, within the first quarter of 2022 the biggest growth wasn’t in the capital, according to data from nehnutelnosti.sk, a property listings platform.
In Banská Bystrica prices were up five percent, in TrencÃn 4.8 per cent, and in Zilina 4.1 percent. In the capital, asking prices increased by 4.4 per cent. The largest increase was in Kosice, where prices rose 10.5 percent.
“The situation around the Kosice real estate market suggests a lack of apartments in most sectors,” says Michal Pruzinsk'y of nehnutelnosti.sk.
Banks hanging in there
The 2022 net profit from the Slovak banking sector fell by 25 per cent year-on-year, according to S&P Global Market Intelligence data, although it managed 2022 reasonably well, considering the unprecedented situation caused by the pandemic, Vseobecna uverova banka Chief Economist Zdenko Stefanides told S&P Global Market Intelligence.
“Indeed, amidst the economy contracting by five percent, increasing unemployment and many sectors of the economy shut for any substantial area of the year, the banking sector was able to continue to grow volumes of loans and deposits [at] a similar pace as before the pandemic,” Stefanides said in written comments.
Mortgage lending to households has grown strongly in recent years, while Slovakia’s household debt-to-GDP is nearing 50 per cent, among the highest throughout Central and Eastern Europe, S&P Global Ratings said inside a recent report.
Huge fiscal and monetary stimulus throughout the pandemic has resulted in a boom within the real estate market globally, raising concerns about potential bubbles.
However, according to Knight Frank, the growth rate should slow.