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The Charm Of Slovakia

01.05.2007
Author: Pinetta VEDRICKAS
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Investing in property in Slovakia is becoming more profitable. With the development of economy and tourism in this country attracts more and more interest from foreign buyers. The number one destination is Bratislava, where the cost of housing is much lower than in other European capitals. However, you should pay attention to the resort town, located in the East of the country.
Slovakia is located in the heart of Eastern Europe and borders the Czech Republic, Austria, Hungary, Poland and Ukraine. Having gained independence in 1993 as a result of the collapse of Czechoslovakia, the country has made a difficult path to building a modern market economy. Over the past five years, Slovakia has moved from the category of lagging countries to the leader of the Central European region. In 2005, according to the World Bank, Slovakia ranked first in the list of countries most reform-oriented and was among the 20 countries most favorable for doing business.
A favorable investment climate and a low income tax rate of 19% attract large European businesses to the country. Thus, more cars are now produced in Slovakia than in any other European country - following the long–standing production of Volkswagen, Peugeot, Citroen, Kia and Hyundai plants have started working here. Other global brands operating in Slovakia include Siemens and US Steel.
Market reforms have also affected the real estate market. Since May 1, 2004, foreign individuals have been granted the right to purchase houses on their own behalf, and it is no longer necessary to create a company to purchase real estate in Slovakia. It should be noted that the country's market is largely focused on high-quality real estate, which is also in demand among local buyers.

Cities in Central Europe
Although the country's capital, Bratislava, is located just 64 km from Vienna, real estate prices here are low by European standards and have significant potential for growth. Housing in the historical center of the city is becoming more expensive – by 15-20% per year. Apartments in new buildings are increasing in price by 5-15%, depending on the distance from the center. Typical buildings built during the Soviet period are the cheapest, and their cost will fall rather than rise. According to the forecasts of most experts, the average price increase in Bratislava in the next three to five years will be 10-15%.
The cost of 1 sq. m. The price in the historical center of Bratislava varies from 1400 to 3700 euros – these are mainly pre-war houses built in a classical style. 1 sq . m . a room in a new apartment located in other areas of Bratislava costs from 1200 to 2000 euros. When buying, there is a VAT of 19%.
The income from renting out high-quality real estate in the Slovak capital averages 6-8% per year of the value of real estate. However, investors should take into account that, unlike other European countries, only 6% of Slovak residents rent housing, most prefer to solve housing problems with the help of construction savings banks. So a stable rental income will bring real estate only in the city center, where the monthly income from one-bedroom apartments will be 450-600 euros, with two bedrooms – 600-850 euros. If, when renting out real estate, the owner focuses on young professionals, immigrants and students, then you can buy inexpensive real estate in any of the districts of the capital. However, the rental income will be much lower – 300-350 euros.
The beautiful ancient city of Kosice is the second largest in Slovakia, it is considered the capital of the east of the country. Letterstone is going to build a condominium with 500 apartments near the center. This complex is perfect for foreigners coming to Slovakia to work. 1 sq . m . The cost of renting an apartment before the start of the project is 800 euros. The director of the company, Simon Hill, explains the choice of investment direction: "Slovakia is ahead of all other Central European countries in terms of cost growth. We assume that the highest growth will be observed in medium-sized cities such as Kosice."

Following in the footsteps of the Alps
Beautiful and inexpensive ski resorts in Slovakia have long been discovered by residents of neighboring countries with Slovakia – Germans and Austrians. The High Tatras remind many people of the Alps, and the resorts of these mountains, with steep slopes and excellent opportunities for freeriding, are more suitable for experienced athletes. The ski slopes of the Low Tatras, which have small slopes, are perfect for family holidays. The ski season lasts here for quite a long time, up to four months, and last year the mountain resorts remained open until April.
It is planned to build a high-class ski resort at the foot of the Tatras according to the project of the famous development company Intrawest. According to Letterstone experts, the construction of such modern complexes is a big step forward for the Slovak real estate market and will undoubtedly increase its tourist and investment attractiveness.
However, the resorts of Slovakia are perfect not only for winter holidays. There are many national parks, lakes, waterfalls in the country, you can visit ancient castles or visit one of the many resorts with spa centers. Anyone interested in real estate in rural areas will be pleased that a small cottage can be bought in one of the villages for only 15,000 euros.
Tourists come to Poprad, which is considered the center of resort Slovakia, all year round. AquaCity Water park is located here, famous for its indoor and outdoor pools with water from thermal springs, the temperature of which reaches 36 °C, and wellness centers. Next to the water park, Slovakia Investment Property is implementing a project to build an apartment complex and offers investors with a budget of at least 886,000 euros to enter the project as a partner.
"This is a great opportunity for large investors to invest in an emerging market with low risk," says Petra Gaidosikova, Director of Slovakia Investment Property. "The partner is a successful and stable local development company, the project of the complex has already been developed, and in addition to funds from private investors, bank financing will also be attracted." The construction of the complex is planned to be completed in 2008.
"As the infrastructure develops, Poprad and the surrounding areas will attract more and more investors," says Kristina Fields of Slovakia Property. – Over the past two years, real estate prices have already increased by 25%, and this trend will continue, especially with the country's transition to the euro in 2009. The improvement of roads has already had a positive impact on the development of the region, in addition, it is likely that Europe's largest discount airline Ryanair will start flying to the local airport. In the near future, Poprad's real estate prices will undoubtedly rise."
The company Exploring Slovakia is selling new apartments in the city of Novy Smokovec, located just 5 minutes away. from the airport in Poprad. The apartment offers a magnificent view of the High Tatras, and the cost is 1 sq. m. m starts from 1000 euros. There are also interesting offers on the secondary market – a three-bedroom wooden cottage located next to Paradise Park National Park is on the market at a price of 45,000 euros.
Historical real estate can also be found in Slovak cities. In the medieval town of Levoca, located close to the ski slopes and just 20 minutes away. from the city of Poprad, a house of the XV century, with six bedrooms, costs only 90,000 euros. "There are many old houses in the city that attract buyers with the beauty of architecture, but their reconstruction may require significant financial investments and take a long time," warns investors Peter Seliga from Exploring Slovakia. "In addition, a special permit must be obtained for the reconstruction and repair of such facilities."
Buying an already renovated house will cost more, but it will save time and nerves. A three-bedroom townhouse in Kezmarok can be purchased for 80,000 euros. Ski resorts are 10 km away, and Poprad Airport is 15 km away.
In Slovakia, real estate buyers can find offers for every taste. These are historical sites, holiday cottages at ski resorts, and residential complexes in the capital of the country. Right now is the right time to buy – the real estate price level in Slovakia is still low, and the country's investment attractiveness has increased markedly in recent years.

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