Is the Slovakia property market boom over

Despite strong economic performance the Slovakian property market showed little growth between 2005-2006, primarily due to an oversupply of property on the market.

The oversupply situation began to recitify towards the end of 2006, resulting in 2007 seeing a 24% average growth across Slovakia.

This property price boom has continued in Slovakia well in 2008. The latest property price data below shows some remarkable growth figures:

Latest Slovakia property price data

	Aug 2007	Aug 2008			Price Growth
BA I	€ 2,485	€ 2,837			14.19%
BA II	€ 1,800	€ 2,087			15.98%
BA V	€ 1,894	€ 1,972			4.13%
Kosice	€ 1,047	€ 1,312			25.33%
Nitra	€ 972	€ 1,265			30.17%
Trnava	€ 1,081	€ 1,450			34.21%
Zilina	€ 1,022	€ 1,223			19.63%
Presov	€ 788	€ 1,081			37.19%

Can this Slovakian property boom continue?

Well the simple answer is that it has already started to slow down.

Affordability is starting to be stretched and properties are certainly becoming more difficult to sell.

I see this slowing trend continuing, despite the continued strong economic performance and Euro entry next year.

Much of the expected price growth due to Euro entry has already been priced into the market I believe.

The Slovakia market is still smaller and less well developed than in the Czech Republic, thus growth is more liable to spurts rather than a reliable steady growth. That said I think growth in Slovakia will now show lower and steadier growth than it has in the past couple of years.

As always, but especially in Bratislava, beware of the huge amount of property in the pipeline that should be built over the next 2-3 years.

Conclusion

The market is still well positioned medium to long term, however, if you haven't already invested in the Slovakian property market i would recommend giving it some space to consolidate otherwise there is a big danger you will be buying at the top of the market - not a good idea.

Given the choice I'd still rather invest in the Czech Republic, where the economic fundamentals are just as good if not better, rental yields are higher and mortgage finance is much better and easier to obtain.

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