Slovakia

Investment Overview
Slovakias capital, Bratislava, is located a mere 50 kilometres from Vienna in Austria where comparable property prices are five times higher.

Transport links between the cities are poor at present but a new highway will link the cities creating a demand for city property and severe undersupply. There are no restrictions on foreign ownership and the tax regime is favourable with a 19% flat tax.

At a Glance
Capital         Bratislava
Population    5.4 Million
GDP/Capita   €3,726
Currency      koruna (SKK)
Language     Slovak

Economic Growth Engine
Slovakia has one of the fastest-growing economies in the EU, as foreign industry and businesses take advantage of Slovakia's highly educated and low-cost workforce.

Ongoing foreign direct investment (over €2 billion in 2005) is driving growth and regeneration in Slovakia, which recently became the largest producer of cars per capita in the world. Peugeot-Citroen has just completed a massive car plant 50km from Bratislava, now ready for production.

Ballymore Properties, major early investors in London's Canary Wharf development, are investing €170 million in the Eurova development that will transform and modernise over ten per cent of downtown Bratislava, the capital city.

Between May 2004 and June 2005 unemployment dropped from 19 per cent to 11 per cent, according to Eurostat; this is alongside a huge year-on-year average growth in per capita salaries of 7.1 per cent.

This economic growth is also driven by a massively business-friendly flat tax regime of 19 per cent across the board. Hence Slovakia is a great location for investment for sustained growth. Meanwhile, increased wealth and confidence in the economy is driving demand for new apartments as the middle class becomes larger, more affluent, and more ready to display its new-found wealth.

Booming Bratislava
Bratislava is situated in the far west of Slovakia, only a 45-minute drive from Vienna, the capital of Austria.

Residential property prices in Bratislava doubled between 2000 and 2002, and in some areas grew by 20 per cent last year.

The emerging middle class now wants to abandon the widespread communist-era concrete, high-rise panalak buildings in favour of modern apartment developments, in line with its improving status and wealth.

There is an estimated demand for 45,000 new-build apartments in Bratislava alone through 2010, but the current completion rate is in the low thousands per annum, ensuring that capital growth and rental yields for new-build property will remain high for some time to come.

Prices on new-build apartment developments are expected to rise by ten to twenty per cent per annum through 2010.

Current rental yields are seven to twelve per cent per annum.

Now is the time to invest. Nearly all the residential development that is currently taking place, or about to take place, will come to market between 2008 and 2009.

By 2010, Bratislava will have been transformed - and after this time, property prices will almost certainly grow at a far steadier, more sedate pace.

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