News

Europe and the ‘unlucky horseshoe'

Catherine Deshayes — 08/03/2010 11:58:00

A significant number of European residential property markets are starting to recover with both sales and prices increasing, according to a new report the Royal Institution of Chartered Surveyors.

The worst performing markets of 2009 were Ireland, Spain, Greece, and most central and eastern European countries. The Baltic States were hit particularly hard with price falls ranging from 27% to 53% in 2009. Together, these countries form a geographic ‘unlucky horseshoe around the edges of Europe', according to reports author, Professor Michael Ball.

Over supply is likely to hold back recovery in some countries, most notably in Spain, Cyprus and Ireland where both unsold holiday homes and primary residences could bring these markets further problems, the report also points out.

According to Land Registry statistics, the number of property sale contracts deposited by non-Cypriots in 2009 was down 73% on the 2008 figure and down by 84% on the number deposited in 2007.

In addition to the well known problems blighting the Cyprus property market, this fall reflects the bursting holiday home bubble around the Mediterranean as a whole.

Towards the end of 2009, some buyers entered the market given the signs of some growth, but the flat or contracting economy, the risk of higher euro zone interest rates and the glut of properties on the market currently don't give much hope for 2010.

Speaking to the Cyprus Weekly, RICS Cyprus executive board member Pavlos Loizou MRICS, said: "In 2009, the residential market in Cyprus experienced price declines between 10-15% in Nicosia and the other cities, 25% to 30% in the tourist areas and between 10-20% in permanent residence areas. There are limited signs of recovery within 2010, and Cyprus will continue to experience a depressed market."

Source: http://www.rics.org/ehr.

When nature calls

Catherine Deshayes — 26/01/2009 12:28:00

The World Wide Fund for Nature has slammed Eastern European ski resorts for the potential impact they are having on the environment in some of the continent's last great wildlife pockets...

There looks to be a slippery slope ahead for ski resorts in Eastern Europe - ambitious plans to construct dozens of new resorts in Bulgaria, Romania, Slovakia and the Ukraine could have grave financial, environmental and social repercussions, a recent study by World Wide Fund For Nature (WWF) claims.

The Fund's Report says, "A number of factors, including rising energy costs, climate change and external costs including water abstraction and biodiversity loss suggest that many of these areas warrant critical appraisal of long term costs and benefits, both in terms of profitability and public interest."

"We risk having ‘white elephants' dotting our increasingly green mountains - expensive investments whose cost, both financial as well as social and environmental, exceed their supposed usefulness," added the report.

Andreas Beckman, Deputy Director of WWF's Danube-Carpathian programme, said, "Construction of ski facilities removes large areas of forest to make way for ski pistes, access roads and infrastructure, reducing and fragmenting habitat for wildlife."

As the majority of the developments are being located at less than 1,500 metres above sea level - a threshold considered in the Alps to be the lowest point at which a ski resort can be currently considered viable in terms of snowfall for skiing - ski resorts with ‘only short term prospects of natural snow also raise significant cost and environmental concerns if they try to keep themselves going with artificial snow,' the report found.

The 3,100 snow cannons around Europe which top up the snow cover, consume some 260,000 kilowatt hours (kWh) worth of electricity annually - this could power a city of 150,000 people for a year.

Wrong side of the law

As well as threatening the natural environment and wildlife, many resorts are being constructed illegally.

A number of Bulgarian projects are being built in protected areas including Rila and Pirin National Parks and Bulgarian Prime Minister Sergey Stanishev opened an illegally constructed ski lift in September.

In Romania, 102 developments have been planned, including in eight of the country's national parks, such as Retezat and Piatra Craiului, the country's main protected areas.

Many are to be built in the Carpathian Mountains, which are currently home to over half of Europe's largest remaining populations of brown bears, wolves and lynxes.

In the Ukraine a £2.5 billion development at Bukovel in the Carpathian Mountains is predicted to be one of the largest in the world with 100,000 beds and 66 lifts, all of which threaten one of Europe's last great wilderness areas.

The report calls on Governments and developers take a critical look at development plans and properly assess the financial, social and environmental costs.

It says, "Skiers have a basic moral responsibility not to support at least those ski areas with the greatest environmental impact, especially those that have been constructed illegally."

All about the money

It has also been revealed that the plans to construct new resorts are far from stable financially.

Up to two-thirds of Alpine ski areas could go out of business due to a lack of snow on current climate change projections, which see temperature rises of between 2 and 5.2 degrees Celsius in coming decades, research from the Organisation for Economic Cooperation and Development (OECD) has suggested.

Thus, the wilderness areas could be damaged for no reason.

Andreas Beckman concluded, "It is irresponsible for Governments to not only allow but actively support such damage when there is very likely no economic future for these resorts.

"If the real reason is a very short term bonanza of chalet speculation then it will be an economic, environmental and social tragedy," he added.

Picture by Garrulus

And the world's best building is...

Catherine Deshayes — 27/10/2008 12:38:00

The first ever World Building of the Year Award winner has been announced, beating off more than 700 other entries from 63 countries...

You may well wonder what a Spanish rubbish dump, the Royal Danish Yacht Club and a Japanese Dental Clinic have in common.

I'll put you out of your misery- they were all shortlisted for the first ever World Building of the Year Award, which celebrates architectural prowess.

Entries consisted of buildings that were new, restored, rehabilitated or converted and completed between January 1st, 2007 and June 20th, 2008.

Paul Finch, Editor of The Architectural Review and Programme Director of the World Architecture Festival (WAF) Awards, said that the most significant building in the world in any given year was not necessarily one of the most high-profile.

"It could be that a primary school in Glasgow or a small church in Peru is actually the building doing most to alter the way we think about the building type," he said.

In the end, Dublin based Grafton Architects' new faculty building at Milan's Luigi Bocconi Free University grabbed gold at the awards in Barcelona.

The University dates back from 1902 and has grown in the past 100 years from a privately funded institution to an international university for business, economics and law.

The campus now comprises an entire neighbourhood within a residential and commercial district.

The winning faculty building contains new conference and lecture rooms, auditorium and research offices for 1000 professors and postgraduate students.

Pic: Bocconi Free University's new faculty building

The 722 entries were split into different categories according to the building's purpose, ranging from learning, civic, culture, shopping, sport and pleasure. The winning building fell into the ‘learning' category.

Each of the categories chose a winner, and then the overall winner was deemed the ‘World's Best Building for 2008.'

The aforementioned Spanish rubbish dump, (which had been transformed into a green terraced agricultural landscape) won the Energy, Waste and Recycling category.

The judging panel, which was headed up by Robert Stern, who replaced Sir Norman Foster at the last minute after one of his designs made it to the final, was looking for ‘architecture that thought about complex issues in an imaginative way.'

The ‘totally 3D' building was chosen as the overall winner as it ‘fitted within the urban landscape but still stood out.'

Mr Stern said, "The use of space, light and local materials captured the essence of the city and the desire of the university to be connected with its surroundings.

"We were impressed by the building's physical and conceptual density," he added.

The new faculty building will have its official opening later this week.

Picture by pontuse

Stop searching! New SEO service is here!

Catherine Deshayes — 27/10/2008 11:19:00

Now is the time to get your website ready for the New Year revival, with TheMoveChannel.com offering an SEO service designed to help you plan and implement the right strategy to attract more buyers when the market bounces...

We all know that things are quiet right now and it's tough to justify dipping into the pockets to spend money.

But once Christmas is out of the way, interest levels will surge - they always do.

The chart above shows search volume trends for property terms over the last three years.

It's clear that the overseas property market is highly seasonal and tails off during the final quarter, with activity jumping sharply as January gets out of the way.

Act Now or Miss Out

Investment returns from SEO are probably the highest of all marketing activities right now - pound for pound, euro for euro, or dollar for dollar, nothing else can deliver you leads as cheaply as ranking number one for a relevant term.

But achieving those results takes an initial investment and results don't happen overnight, so it's no use waiting until the New Year to make sure your SEO strategy is in place.

The Solution

Good SEO companies are hard to find, particularly with knowledge of the property sector.

The SEO service from TheMoveChannel.com is a strategic solution that builds on nearly 10 years of Internet market experience in the international property industry.

Thus, it delivers genuine insight and real long term value.

For a fixed fee of £2950, we will conduct a 5-stage Review plan, which covers the following:

Property Product Review

Website SWOT Analysis

Keyword Universe Creation

Optimal Phrase Selection

Competition Assessment

This would lead to a series of recommendations and an SEO Implementation Plan, which covers:

On Site Recommendations

Link Building Strategies & Tactics

At this point, you can then either commission us to put the plan into action, or implement it internally.

Depending on the scope and extent of work to be done, we work to budgets of £500, £1000, £2000, or £5000 for the initial implementation plan, with the same figures for ongoing work if this is also required.

Call Us Now to Book the Service

If you'd like to take advantage of this offer, please call TheMoveChannel.com on +44 (0)207 952 7658 or contact Marketing Manager Jon Moore on j.moore@themovechannel.com

Hilton to open new hotel in Slovakia

admin — 25/02/2011 12:21:00

Hilton Worldwide announced today the signing of a franchise license agreement with Tehelne Pole a.s for a DoubleTree by Hilton hotel in Bratislava, Slovakia.

The newly-built property, already under development, is anticipated to open in Q2, 2011 and will be the second Hilton Worldwide property in the country.

The 120-guestroom DoubleTree by Hilton Bratislava will be conveniently located in the commercial district of the capital city. The hotel’s prime location is just 2.5 kilometers from the city centre and adjacent to the city’s new, multi-functional 9,000 capacity event center – a key venue for the Ice Hockey World Championship in Bratislava and Kosice in April and May 2011.

The event center will also be home to the local ice hockey team. As the capital and largest city of Slovakia, Bratislava is the political, cultural and economic hub of the country. DoubleTree by Hilton Bratislava’s conference facilities, proximity to the new event center and near-to-city location will make it a desirable option for a range of travelers.

Source: Business Wire

IMF: Global decline 'may not be over'

Catherine Deshayes — 12/03/2010 11:35:00

House prices in the world's major economies, which in 2009 were down an average of 5 percent from 2007, may keep dropping, said Prakash Loungani, an adviser to the International Monetary Fund's research department.

"The corrections thus far have not erased all of the excesses generated by the house price increases," Loungani wrote in the March issue of the IMF's "Finance and Development" magazine. "That leads to an uncomfortable conclusion: house prices in many countries still have room to fall."

Loungani didn't single out individual countries where homes may be overvalued. The article said prices will probably decline further because they remain "well above" levels seen at the start of the housing boom around 2000, and also because values are higher than rents and income, which "serve as long-run anchors" on the cost of residential real estate.

Loungani said that between 1970 and the mid-1990s, increases in home prices in 18 nations lasted about five years on average, and values climbed 40 percent after adjusting for inflation. During that same 25-year span, declines lasted an average of about four-and-a-half years and prices fell about half as much as they rose, the article said.

In contrast, the most recent global housing expansion lasted 41 quarters, almost twice as long as average, and prices rose three times as much.

"Because prices rose much more sharply than in earlier upturns, their decline might eclipse those observed in the past," Loungani wrote

Source: www.businessweek.com

Spotlight on Slovakia

Catherine Deshayes — 04/11/2009 12:31:00

Despite high local demand for new housing, Slovakia real estate prices continue to fall due to the impact of the global recession, but with the amount of rental units limited, yields on apartments not covered by rental control remain high - great news if you are considering investing in a buy-to-let property in the country...

The average dwelling price in Slovakia dropped by 13.4% to €1,342 in Q2 2009 from a year earlier, and Slovakia's economy contracted more than 5% y-o-y during the first half of 2009. Slovakia's house price boom had already come to a halt in 2008, as a result of the global crisis.

When adjusted for inflation, the average price actually fell by 15.3%, according to house price figures published jointly by the National Bank of Slovakia (NBS) and the National Association of Real Estate Agencies in Slovakia (NARKS).

The Bratislava region, which covers the capital city, experienced some of the sharpest price falls, at 14.23% (16.2% in real terms) during the year to Q2 2009.

All other regions registered price falls, ranging from 3.2% to 23%.

Small apartments, which had risen in value most, fell furthest:

Apartments saw the sharpest price falls. The average price of flats fell 15.3% (17.2% in real terms) to €1,372 per sq. m. in the year to Q2 2009.

Smaller units (1 - 3 bedroom units) saw the biggest price falls, with losses ranging from 13.8% to 19.75% during the year to Q2 2009.

Ironically apartments had led Slovakia's property boom, with average prices rising 87% (70% in real terms) from 2005 to 2008, rising from €635 per sq. m., to €1,080 per sq. m..

Smaller apartments previously experienced the sharpest price increases, with one room units (typically called studio apartments in the US) rising 104% (85% in real terms) to €1,239 per sq. m. in 2008.

The average price of apartments with five rooms or more, however, rose 5.5% during this recent period. These large apartments had seen relatively small price rises (56%), during the boom period from 2005 to 2008.

The average price of detached houses fell 9.8% (11.9% in real terms) during the year to Q2 2009, to €1,156 per sq. m.

During the boom, the price of detached houses had only risen 40% during the period from 2005 to 2008 (27% in real terms), rising from €680 per sq. m. to €862 per sq. m..

The price of villas was down by 0.11% (2.4% real) to €1,777 per sq. m. during the year to Q2 2009.

Villa prices rose only modestly during the property boom, with a 25% price rise from 2005 to 2008 (14% in real terms), rising from €1,130 per sq. m., to €1,288 per sq. m..

Slovakia's GDP fell by 5.3% during the year to Q2 2009. The economy is expected to stabilize during the second half, and the economic contraction is expected to be around 5% for the entire 2009.

House price falls are not expected to worsen, except in excessively overvalued areas. But rising house prices are unlikely for the next year or so.

The boom: Slovakia's poorer regions gained most

During the boom Slovakia's property prices doubled in less than five years , and in some regions price increases were much higher. Strong economic growth, low interest rates, and anticipation of the adoption of the euro pushed house prices up.
Prices in poor areas rose fastest, partly because poor regions received more foreign direct investments (FDI).

Residential property prices rose 140% in Trencin, a region in Slovakia's north-west (120% in real terms) from 2005 to 2008. Trencin has some of Slovakia's lowest house prices, at €777 per sq. m. in Q2 2009.

Another example: Nitra, where house prices (at €727 per sq. m.) are the country's lowest, saw house prices double between 2005 and 2008, along with Zilina, Banska Bystrica and Kosice.

Trnava, traditionally the region with the second highest property prices, experienced the smallest price rises from 2005 to 2008, at 55.25%.

The downturn: Bratislava, and the East, hit

Kosice has had the sharpest house price falls this past year, at 23%. Kosice is a mountainous region in the south-easternmost part of Slovakia.

Another province in eastern Slovakia - Presov - saw prices fall 12% (14% in real terms) y-o-y to Q2 2009, falling just less than Bratislava.

Economic growth powered the house price boom

Strong economic growth, supported by low interest rates, powered Slovakia's house price boom.

Slovakia's real GDP growth was 10.4% in 2007, following 8.2% for 2006, 5% for 2005, and 5.5% for 2004. Even in 2008, real GDP growth was an impressive 6.4%, making the Slovak Republic the fastest growing economy within the EU and OECD. From 2002 to 2008, real private sector wages rose by an average of 9.2% annually - an immense rise in purchasing power.

Unemployment dropped to 8.7% in Q4 2008, a significant drop from 19% in 2001.

The budget deficit has been reduced from 10% of GDP in 2000, to just 1.5% of GDP in 2003 and 2.2% of GDP in 2008, still much better than other countries in Europe.

Yet now, the economy is shrinking

Now Slovakia's economy is expected to shrink by 5% in 2009. The unemployment rate has already risen to 11% in Q2 2009 and is expected to reach 13.6% in 2010. Real wage growth will remain positive, but slow to 4.2% in 2009, and 1.2% in 2010.

To cushion the impact of the recession, the government is doling out subsidies. For instance, state allowances were given to companies that employ redundant employees for at least 60% of their basic wage.

This is quite worrying, because Slovakia's government needs to continue on its reform path, to keep gaining competitiveness.

The mortgage market is mercifully small

Despite the rapid growth of the mortgage market, outstanding mortgages amounted to just 12.7% of GDP in 2008, one of the lowest mortgage-debt-to-GDP ratios in the EU and far below the EU average of 50% of GDP.

The volume of housing loans to households increased from €2.9 billion in 2004 to €8.5 billion at end-2008, with average growth of 30% annually from 2005 to 2008.

Slovakia's banks have become very cautious

When other countries adopted the euro, interest rates on mortgages fell dramatically - but not in Slovakia (which adopted the euro in January). By May 2009, the key ECB rate had been reduced to 1%, but Slovakia's floating loan rate remained more than 4 percentage points higher, at 5.52%.

In addition, Slovakia's long-term fixed loan rates have risen strongly. For instance, here are the average interest rates on housing loans in 2006:

Floating rate, or fixed for up to 1 year: 5.74%,

Fixed for 1 - 5 years: 6.03%

Fixed for 5+ years: 7.07%.

But by July 2009, interest rates on 5 year + fixed housing loans had risen to 8.15%, i.e., more than 2% above the 1-5 year fixed rates (5.96%), or loans fixed for up to a year (5.52%).

Slovakian financial institutions have become extremely cautious. Clearly, they believe interest rates will rise sharply, and they are refusing to absorb the risk.

Little private renting, outside Bratislava

In 1990 mass privatization of flats began in Slovakia, and in 1993 social housing units were sold to tenants at bargain prices. Three-bedroom flats were sold at around €495 to €1,649 - less than 5% of their real market value.

Owner-occupancy rose dramatically, from 49.7% in 1990, to 85% by 2004. The share of co-operative housing fell to 7%, and the share of public rental housing to 5%.

However no private rental sector replaced the previous state system. Only 0.1% of Slovakia's housing stock is let out by private landlords, mainly concentrated in Bratislava. Strong tenant protection laws discourage landlordism. For instance, landlords must provide the tenant with alternative accommodation in case the rental contract is terminated, regardless of the cause of lease termination.

In 2005, the government decreed the abolition of rent control, effective July 1, 2007. However, the decree was never implemented. Rent deregulation has been postponed repeatedly, as Parliament refuses to deal with the highly sensitive issue.

In Bratislava, yields are quite good

The extremely tight supply of rental units has led to generous gross rental yields on apartments not covered by rent control.

In Stare Mesto, Bratislava's city center:

Yields on 120 sq. m. and 190 sq. m. apartments were around 5.6%, according to Global Property Guide research in July 2009.

Yields on smaller units of 40 sq.m were even higher, at 6.75%.

In Bratislava's less upscale districts (Bratislava II & III), gross rental yields were between 5.5% and 7.03%.

The housing stock is an awful mess

In 2005, Slovakia had 309 dwellings per 1,000 inhabitants, well below the EU 15 average of 457 dwellings per 1,000 inhabitants. A large portion of the housing stock needs replacing, especially the poor standard "panelaks" built during the communist regime.

Estimates suggest that around 45,000 to 50,000 new apartments will be needed annually during the coming years. In 2007, only 16,473 new dwellings were completed, one-third in Bratislava.

"This is a very interesting situation," says Andras Patkai of Ceinvest.sk. "There was a 10-year period after the fall of communism when nothing was built. The gap (in construction) is what is forcing the pace. There is tremendous local demand for new built units," he adds.

"We see increasing local demand for the West of Bratislava," says Patkai. "In the Eastern parts there are many ugly Communist-era blocks, which will be the living place for the working class and for new arrivals from the rest of Slovakia."

Written by www.globalpropertyguide.com and www.nuwireinvestor.com

Picture of Bratislava, Slovakia

Eastern Europe: A retail property Mecca?

Jaimie Kanwar — 27/02/2009 12:17:00

Current economic events provide both high risks and potentially high rewards for investors in the Central and Eastern European property market, claims one expert...

According to Patrick Young, Chairman of Projekt Vistula, the retail explosion in Eastern Europe during the past two decades has been considerable but there remain significant opportunities for judicious investment.

Judicious is of course the key factor. Simply piling into capitals whether it is Budapest, Moscow, Riga, Warsaw or any point thereabouts has proven an expensive option in recent years. Nevertheless, yields are rising as capital values have fallen, so opportunities will re-emerge.

Infrastructure improving

However, the biggest opportunities currently can be found in second and third tier cities. Road infrastructure is improving in many countries. For instance, the expansion of the Polish motorway system joining north and south and east and west by 2012/2013 will revolutionise traffic movement.

This will have a huge impact on logistics, permitting much cheaper and easier transportation across not merely Poland but in fact all the way through much of CEE and farther east from the EU (and vice versa). Moreover, the opportunity to drive intercity distances of 100-300 kms much more easily will be a huge fillip to the retail emporia themselves.

In that respect, investment in retail property in secondary or tertiary cities will be an interesting option - particularly if property prices continue to sag in much of eastern Europe.

Outside the EU, even in major cities, retail opportunities can be highly significant in coutnries such as Belarus or Serbia for instance.

Domino effect

However, often retailers are nervous about supply chains and existing product distribution arrangements which they feel may be anti-competitive to their expansion into these countries.

This may impact upon investment decisions although in many of these countries, property prices are relatively low and indeed existing retail operations make the market ripe for new entrants.

At yields around 15% developers/buyers are probably interested, presuming they can find the finance. Another difficulty right now is the instability in currency rates and the general panic in western markets about an eastern European domino effect.

Ultimately, the western media love the "wild east" tag but right now the opportunity to find great deals is coming closer in many parts of the CEE/SEE retail market.

Source: www.glgroup.com

10 tips for investing in emerging property markets

Jaimie Kanwar — 27/02/2009 10:00:00

Overseas property can bring high capital returns, but the key is being able to identify the next property hotspot and ensure that returns are maximised.

To that end, here are 10 tips on how to successfully identify an emerging market

1. Research, research, research

Do not judge a place on face value. It is essential that buyers conduct full and thorough research into the markets they are planning on buying; how far it is from the airport? How close are the local shops, restaurants, the beach and hospitals?

2. Consult the experts

Purchasing in an emerging market can mean that there is a lack of information available regarding investing in the country. As such, it is essential that buyers consult those who specialise in investing in the region.

3. Planned EU membership

EU membership brings inward investment and the easing of restrictions on the movement of capital and trade. Many new EU states, such as Poland, have seen property prices soar following their joining.

4. Leisure facilities

Large scale facilities such as ski runs, golf courses, hotels, spas and diving centres, increase the demand for holiday homes and boosts property values. These facilities will also attract tourism, and as such rental yields will increase.

5. Government and private investment

Investment encourages improvements in the local infrastructure and amenities, bringing money into the area, strengthening the economy and pushing house prices upwards.

6. Up and coming events

Major events on the sporting calendar such as the Olympic Games or golf tournaments encourage development and regeneration and attract tourists to the area, boosting house prices.

7. The law

Keep abreast of legal issues surrounding foreigners' access to the housing market, as well as any changes to purchasing restrictions for foreign investors, this is particularly important in emerging markets, as the situation can change quickly.

8. Tax

Check the inheritance and capital gains taxes in the country you are purchasing in. It is extremely unlikely that taxation laws will be the same as in the UK. In some areas, such as North Cyprus, you may be exempt from inheritance tax, however, in others, buyers may have to pay tax on pensions, or even tax in both the UK and the country of purchase.

9. Arranging finance

In some emerging markets you may not be able to get a mortgage in the country of purchase and will have to get one in the UK. However, if your mortgage is in the local currency then you must consider the impact of fluctuations in exchange rates.

10. Read the contract

If you are given a contract in a foreign language then ask for a copy in English. Ensure that you read it carefully and are clear on everything, especially the deposit, completion date, what's included in the property price and whether there are any additional charges.

Dermot O'Kane, Director of Property International, offered the following guidance for emerging market hunters: "Identifying and investing in emerging markets requires a lot of market knowledge, particularly as in these ‘hotspots' property prices are governed more by the local buyer than by the overseas one.

"Never assume anything. The key to success in an emerging market is research; look into everything, from finance and taxation to local restaurants and flights.

"When armed with a full knowledge of the area, and you have established what type of property you are after, it is essential to act fast to keep ahead of the game and really capitalise on the country's status as an emerging hotspot."

To find exciting properties in emerging markets, visit our investment property portal: http://investment-property.themovechannel.com/

Picture: Greenwichmeantime.co.uk

Slovakia ‘safe as houses’?

Jaimie Kanwar — 10/02/2009 11:58:00

Slovakia is one of the safest places to make a property investment in 2009, it has been claimed...

This is the view of overseas property portal Property Abroad, which believes that of all the emerging economies in Eastern Europe, Slovakia will be ‘the most robust' in 2009.

Les Calvert, Director of the company explained: "Though we see a rise in unemployment for 2009, the rise will be small, perhaps even smaller than the drop in unemployment we saw last year; meaning unemployment will still be lower than it was in 2007.

"We also see a slow in GDP growth, but not into negative territory as has already been seen in the larger markets. Slovakia GDP growth was recorded at an incredible 7.1 for 2008, we see it falling to a more sustainable 2-3% for 2009, where it will likely stay for 2010".

Source: http://www.property-abroad.co.uk

Slovakia: Star of the CEE?

Jaimie Kanwar — 09/02/2009 09:20:00

Slovakia is poised for a sustained period of strong economic growth in 2009, it has been claimed...

According to Robin Bowman, Editorial Director of Property Secrets, Slovakia is ‘currently one of CEE's golden boys’ and looks ‘poised for a period of strong economic performance’.

Mr Bowman added: “Slovakia’s growth will be helped especially in 2009 after the adoption of the euro. We forecast 6.5% 2008 and it's the the same in 2009. Wage growth is strong, but not inflationary as productivity growth remains high.

“Car manufacturing and ancillary services and manufacturing will remain the country's key economic driver. While these will inevitably be affected by an economic slowdown in key markets, Slovakia will maintain its competitive edge and continue to attract strong investment.

”The property market performed well in 2008 and will perform even more strongly in 2009 following the adoption of the euro. Bratislava looks especially well positioned for growth, benefiting particularly from its low cost and huge tax advantage relative to nearby Vienna".

Source: www.propertysecrets.net

European construction sector

Catherine Deshayes — 23/01/2009 09:21:00

The construction sector's seasonally adjusted production decreased by 1.1 per cent in the euro area in November 2008, compared to previous month, and by 4.7 per cent year-on-year, according to figures published by Eurostat, the Statistical Office of the European Communities...

Monthly comparison
Among the Member States for which data are available for November 2008, construction output rose in three, fell in eight and remained unchanged in Germany and the United Kingdom. The increases were registered in Sweden (+1.2 per cent), Slovakia (+1.1 per cent) and Romania (+0.8 per cent). The largest decreases were recorded in Slovenia (-20.3 per cent), Portugal (-6.5 per cent) and Bulgaria (-6.1 per cent).

Annual comparison
Among the Member States for which data is available for November 2008, construction output rose in five and fell in eight. The highest increases were recorded in Slovakia (+16.5 per cent), Romania (+13.8 per cent) and Poland (+7.0 per cent). The largest decreases were registered in Spain (-9.7 per cent), Slovenia (-8.2 per cent) and the United Kingdom (-6.3 per cent). Overall, building construction decreased by 4.2 per cent in the EU in November.

Source: www.homesoverseas.co.uk/news

Slovakia: in the zone

Catherine Deshayes — 07/01/2009 09:18:00

As the 16th country to adopt the Euro, Slovakia is hoping that becoming part of the Eurozone will help bring economic stability during the global economic crisis...

Compared to the 11 members who adopted the Euro exactly a decade ago, today, over 50 per cent of European Union citizens, a population of some 328 million people now use the Euro.

Slovenia and Cyprus are the most recent countries to have benefited from Euro adoption. The recent strength of the Euro against the pound sterling has evoked mixed reaction within the Eurozone with countries such as Spain, Greece, Italy and Portugal worried about the likely impact of Euro pound parity on tourism revenues in 2009.

On the other hand Euro founder members such as France are enjoying the transcontinental shopping bargains to be had from lower consumer goods prices in the UK.

"Slovakia is viewing its adoption of the Euro a positive move as despite likely increases in the prices of consumer goods and services, its economy is set to benefit from the multinational companies enjoying decreased currency volatility brought about by conducting business in Euros,"said Chintan Mahida, Global Property Analyst at Nubricks.com.

The Slovensko Republic has been a favoured investment destination of choice by a number of global companies with Dell, Peugeot Citroen, Samsung and Sony for their European manufacturing bases.

The belief is that the Euro will bring much needed raw material and labour cost savings at a time when manufacturing output is on a downward trend and the Slovak crown was gaining in value.

The smooth running nature of doing business in a Euro denominated environment should brings further dividends with greater investment into an already prospering country. Slovakia's GDP will grow by only four to five per cent in 2009 set to be the most rapid growth in the EU but had the crisis had not occurred, Slovak economic analyst Pavol Karasz believes Slovakia's economic growth would have exceeded six pe rcent in 2009.

Slovakia remains a strong Eastern European investment prospect in 2009 underpinned by an economy which continues to grow and many believe that the Euro will further prosperity to the Slovenska Republic.

Source: www.nubricks.com

Shopping mall for Slovakia

Catherine Deshayes — 03/12/2008 09:22:00

Quinlan Private Golub, the central and eastern European development company of Ireland's Quinlan Private, is to develop a large shopping centre scheme in Bratislava, Slovakia...

The development of the 645,840 sq ft South City Shopping scheme will begin in 2010 ahead of a third quarter 2012 opening. Quinlan said the timing of the scheme's opening should coincide with renewed economic ‘optimism and growth' globally.

The company said financing and planning had been secured for the scheme in the Petrzalka district. The scheme will aim to capture spending from a population of 1.8 million people within a 40 minute drive.

John Newton, Quinlan Private Golub Country Manager for Slovakia and Hungary said plans for the scheme ‘are still being worked on in close cooperation with the city of Bratislava' and were not ‘cast in stone yet' but that ‘its strategic location, with motorway access and public transport links, makes it very attractive as an investment.'

Source: www.propertyweek.com

Global phenomenon

Catherine Deshayes — 11/11/2008 10:45:00

Worsening economic conditions have now taken a toll on almost every commercial property market in the world, according to a global survey of real estate surveyors...

The past few months have seen a sharp deterioration in performance and demand for real estate in many regions that had previously appeared resilient to the credit crisis, in particular parts of Asia and Eastern Europe.

The slump in commercial property is well established in mature markets such as the UK and US, but a report today from the Royal Institute of Chartered Surveyors shows that there are few property markets in the world that remain unscathed by the economic crisis.

The net balance of movements in global rents turned negative for the first time in the survey's history, led by weakness in the US, Japan, Spain, Ireland and India, while property values also worsened markedly in the third quarter.

The report, which measured sentiment among surveyors about the value and tenant demand for property, singles out the Indian market as being particularly hard hit. The region has attracted many overseas investors hoping to tap into the property needs of a previously booming economy.

Rising interest rates, higher inflation and a lack of liquidity is affecting confidence in the country, says the report, and 45 per cent more surveyors reported a fall in occupier demand compared with six per cent in the last quarter. The balance of surveyors reporting investor purchases plummeted from zero to minus 73.

The biggest slump in capital values has been in Eastern Europe, a marked turnaround considering expectations of growth only three months ago.

Source: The Financial Times

Capital Comparisons - Bucharest v Bratislava

Jude Buttle — 22/10/2008 08:49:00

Capital cities are the core of any country. We take a look at two capitals that were once under communism rule and compare briefly their current property market.

1. Bucharest

Known for its wide, tree-lined boulevards, its glorious Belle Époque buildings and having a reputation for a lively nightlife, Romania's capital was once referred to as the ‘Little Paris' of Eastern Europe.

With the introduction of low cost flights and Romania's admission into the EU, foreign investors flooded the market and boosted the property prices in Bucharest. Romania was depicted as the next Eastern European emerging market, along with Bulgaria.

Real estate prices in the capital have been constantly appreciating since 2002 and between 2005 and 2007 prices of old apartments rose by about 160 per cent.

But after rises by as much as 50 per cent in 2007, property prices fell in Bucharest in the first quarter of 2008 and although estimates of the price crash range from 10 per cent to 25 per cent, some experts believe that the five year house price boom is over.

Now, after higher interest rates and the depreciation of the Romanian currency, many investors are disappointed with their returns and complain that corruption is rife, which is tolerated or ignored by the government.

Foreigners are encouraged to invest so there are no restrictions for them acquiring dwellings, although ownership of land is still complicated. Apartment prices in the centre of the city range from €3,900 to €4,400 per square metre and Gross rental income on apartments is around 5.5 per cent, according to Global Property Guide research.

Conclusion

Not the promised land many expected but there are still opportunities for good deals and prices are still lower than many other European capital cities. Despite the concerns, there continues to be an influx of foreign investment, but if you are considering investing there, be diligent and do your home work.

2. Bratislava

Bratislava is the political, cultural, and economic centre of Slovakia and the country's largest city. The spirit of its past is tangible and visitors will enjoy the many reconstructed fountains, gothic churches, romantic narrow alleyways and one of the most stunning old squares in central Europe.

Bratislava is now a boom town with an influx of foreign manufacturers and consultants, and the construction of an enormous amount of new infrastructure is visible. Unemployment is falling at a significant rate and the city is now a hub for Europe's low-cost airlines as a significant increase in tourism takes place.

International buying interest has been strong since the country allowed foreign purchases in 2004 and this has been bolstered by the fact that their equivalent of stamp duty was abolished in 2005. Also, after a lull period of 10 years where very little was built after the fall of communism, the city is now constructing many new builds as there is such a local demand for them.

There have been massive house price increases in the country, accompanying the surging economy. Residential property prices rose 32.5 per cent (28 per cent in real terms) in 2007 and for foreign investors these gains have been magnified by the significant appreciation of the koruna, which has risen from €1=38.5 koruna to €1=30 koruna over the past two years.

The real estate market received a further boost from the announcement that Slovakia will adopt the Euro in 2009. This is expected to push house prices up strongly in 2008 and already in quarter one the average property price was SKK44,463 (€1,450) per square metre, up 34.5 per cent from the same quarter last year.

Swift economic growth is the main fuel for the increase in real estate prices and Slovakia's economy grew by an impressive 14.1 per cent at the last quarter of 2007, pushing 2007's GDP growth rate to 10.4 per cent. Average GDP growth from 2002 to 2006 was around 6 per cent.

Yields in Bratislava are moderate at an average of 5.2 per cent. The city centre, Staré Mesto, boasts some of the most expensive property in Bratislava. By Global Property Guide estimates, gross rental yields on 120 square metre and 180 square metre apartments are at around 4.5 per cent. Whereas, gross rental yields on smaller units of 60 square metres registers the highest at 6.10 per cent.

Conclusion

With demand for properties still increasing, the rapid rise in the country's economy and purchases from both foreign and local investors, Bratislava is looking like a good place to invest in, for the short term at least.

Verdict

Both cities look good for the short term, but Bratislava, which seems to have a stronger economy and a more stable political system, gets the nod as a city probably better equipped to last the distance.

Search for property in Romania and Slovakia

Browse for property for Sale in Bucharest

Browse for property for sale in Bratislava

Photo by dittaeva

New property sites launched

Catherine Deshayes — 10/10/2008 09:49:00

TheMoveChannel.com, the leading international property portal, announces the launch of over 80 country specific property sites...

Each country site features in depth property listings that can be filtered by a multi criteria search engine. The investment opportunities listed include both residential and commercial properties, land and more unique property types.

Developers, estate agents and private owners who advertise with TheMovechannel.com will double their exposure by appearing on both the main TheMovechannel.com international property portal and the relevant country portal that their properties are located in. Advertisers however will not be charged any fee for this additional coverage.

Buyers can gain a valuable insight into countries through the dedicated country news, features, email newsletters plus online buying and selling guides.

Dan Johnson, Managing Director, comments, "We've recognised in the toughening real estate market, investors are adopting a more sophisticated and informed buying process.

"The new portals not only provide detailed information on the property stock available in a particular country but also fill in the gaps in investors' knowledge of a market through reference materials and frequent news updates," added Mr Johnson.

Source: www.themovechannel.com

Slovakia's top BTL market is...?

Jaimie Kanwar — 03/07/2008 10:10:00

When it comes to BTL in Slovakia, one city seems to have a major advantage.

According to Petra Gajdosikova Managing director of Slovakia Investment Property, Buyers looking to invest in Slovakia should look to the capital city Bratislava. Mr Gajdosikova explained: "For the most part Slovakians own their property rather than renting it, but the capital being the exception to this rule.

"For there to be a rental market you need a lot of expat companies and students and so on, so Bratislava has always had the best rental market. Some investors are still tempted by property elsewhere in the country because of its lower price, but western buyers of rental property in central and eastern Europe were often surprised by just how high a rent they were able to charge.

In a recent interview, EC Economic and Monetary Affairs Commissioner Joaquín Almunia praised Slovakia's economic convergence, as well as the changeover process in Malta. He commented, "Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January, 2009.

"However, to ensure that the adoption of the euro is a success, Slovakia must pursue its efforts to maintain a low-inflation environment, be more ambitious with regard to budgetary consolidation and strengthen its competitiveness position. It must also now speed up its practical preparations to ensure that the changeover takes place smoothly, as it did in Cyprus and Malta in January 2008."

Two thumbs-up for Slovakia

Jaimie Kanwar — 05/06/2008 00:00:00

Slovakia's latest vote of confidence is sure to delight international investors…

EU finance ministers have cleared Slovakia for euro entry, which is due to happen on 1 January 2009. The ministers' decision comes eight weeks after the European Commission and European Central Bank gave their blessings for the demise of the koruna.

Slovakia still needs the approval of EU heads of state at a summit in two weeks before the finance ministers fix the exchange rate in July. If granted, Slovakia would become the 16th nation to adopt the single currency. Last week, its government revalued the currency upwards by almost 18% to help tackle inflation and improve its conversion rate to the euro.

A spokesperson for Slovakia Investment Property commented: “This vote of confidence will bring a new influx of foreign direct investment into Slovakia, increased confidence of international investors and even higher growth. And all that is certainly excellent news for the property market as well.

“The conversion rate for SKK into euro has not yet been decided. At the current market rate of just above 32 SKK/EUR the koruna is significantly stronger than the previously set central parity of 35.44 SKK/EUR. It is expected that the final conversion rate will be more closely aligned with the current market level”.

The 'mega projects' of Bratislava

Jaimie Kanwar — 28/05/2008 00:00:00

Prospective investors are keeping a close on Bratislava’s exciting construction boom…

As a result of the huge demand for residential properties, there are many interesting ‘mega projects’ under construction in Slovakia’s capital city, reports Andras Patkai of CEInvest:

South City
This 7500 unit behemoth is being built by he Slovak Cresco Group, and will be constructed on 90 hectares of land in Petrzalka at will cost SKK 50 billion (EUR 1.5 billion), with a completion date projected for 2017.

Twin City
At a cost of SKK 17 billion (EUR 531 million), this huge project will contain a 4-star hotel, 320 apartments, and 200,000 m2 of leasable space for office or retail use, while radically transforming the central bus and coach station. Projected completion date – 2011.

Panorama City
Set to become one of the tallest building complexes in Slovakia, the SKK 9 billion (EUR 281 million) Panorama City, began construction in November, 2007, and is situated next to the new Slovak National Theater and Eurovea. The complex will contain 450 apartments, 7300 m2 retail space, 6500 m2 offices, a 4-star hotel, a wellness center and 25m swimming pool. Projected completion date – 2011.

River Park
This is already under construction on the bank of the Danube at a cost of The SKK 7 billion (EUR 220 million). 30,000 m2 of land will house 220 luxury apartments, shops, offices and the 5-star Kempinski Hotel. Projected completion date – 2008.

Other ongoing projects in Bratislava include:

Three Towers in Bratislava III - 211 luxury apartments in three spectacular glass and steel towers.
400 new apartments in the Lipovy Haj development.
Slovany building complex on Racianske Myto - a 41-floor residential tower and a restaurant at the top.

In a recent interview, Economic and Monetary Affairs Commissioner Joaquín Almunia praised Slovakia’s economic convergence: “Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January, 2009.

“However, to ensure that the adoption of the euro is a success, Slovakia must pursue its efforts to maintain a low-inflation environment, be more ambitious with regard to budgetary consolidation and strengthen its competitiveness position.

“It must also now speed up its practical preparations to ensure that the changeover takes place smoothly, as it did in Cyprus and Malta in January 2008."

Slovakia + the Euro: A good match?

Jaimie Kanwar — 15/05/2008 00:00:00

What positive impact is the single currency likely to have on the Slovakian economy...?

In early May, Slovakia got the go-ahead from the European Commission to join the eurozone on 1 January 2009, but, what positive impact is the single currency likely to have on the Slovak population, businesses, economic development, and importantly, local property prices?

Domestic and foreign analysts agree that the euro adoption will be beneficial to Slovak citizens as well as businesses. The most obvious benefit will be reduction of transaction costs (on trades in euros) and removal of exchange rate risks - all good news for GDP growth.

Currently, the transaction and administration costs on trades in euro are approx 0.36% of GDP - according to the National Bank of Slovakia, NBS – costs which will decrease after Jan 2009.

Slovakia's foreign trade turnover is over 160% of GDP and more than 80% of this is trade with the EU (in euros). So the advantages here are obvious.

Euro adoption should also bring lower cost of capital for businesses and individuals and hence stimulate investment. Although interest rates in Slovakia are already quite low, there is still potential for reduction by 1% or so.

Indirect benefits

Apart from the obvious direct benefits of the euro, there are many - much wider - indirect ones.

Economists forecast a growth in foreign direct investment (FDI) and foreign trade, which in turn contribute to higher GDP growth and fast rising prosperity of Slovak population.

NBS expects Slovakia's trade with eurozone members to gradually increase (in the long run) by up to 90% after euro adoption. FDI will be boosted in many ways - thanks to the perception of higher stability of Slovakia due to the euro, investors savings on transaction costs as well as elimination of exchange risks.

According to NBS the total increase of GDP (in the long term, over 20 years) thanks to growth of international trade and rising FDI as a result of euro adoption should amount to 7-20%. The euro is estimated to contribute to economic growth by 0.7% (of GDP) annually on average - at stronger rate in the first few years after joining the euro and to a lesser extent in the later years.

Rise in property prices?

Most experts seem to expect an accelerated rise in property prices imminently after euro adoption. In truth, there is little that would indicate this to be a sure thing - at least in the very short term.

As with other goods, it may be more a matter of perception of the general public that euro brings increased prices. As proven by statistics, the rounding up effect in the 15 countries that adopted the single currency was negligible.

A possible hike in property prices might, however, come as a result of somewhat miscalculated expectations of the sellers - refusing to sell their property for its market value in the months prior to euro adoption, in expectation of strongly increased values after January 2009.

Slovakia has seen a similar situation in the six months or so prior to the country's EU entry. Sellers, expecting a strong appreciation imminently after the May 2004 EU entry, were holding onto their flats to sell after May. The resulting extremely low supply of properties on the market and the usual strong demand from buyers have caused prices to shoot up prior to May 2004.

As the market stabilized and many more properties were offered for sale, prices returned close to the normal pre-May values. It is possible that the euro adoption will cause a similar euforia among property owners and sellers. However, any out of order price hike purely due to the introduction of the new currency should be just a short term anomaly.

Influx of FDI?

The medium to long term benefits for property prices are of course a whole different matter. The advantages here are the same as the benefits of the euro for the entire Slovak economy.

A spokesperson for Slovakia Investment Property commented: “This vote of confidence will bring a new influx of foreign direct investment into Slovakia, increased confidence of international investors and even higher growth. And all that is certainly excellent news for the property market as well.

“The conversion rate for SKK into euro has not yet been decided. At the current market rate of just above 32 SKK/EUR the koruna is significantly stronger than the previously set central parity of 35.44 SKK/EUR. It is expected that the final conversion rate will be more closely aligned with the current market level”.

Slovakia ready to rock and roll

Jaimie Kanwar — 14/05/2008 00:00:00

Slovakia is on the verge of a momentous economic step forward.

In a recent interview, Economic and Monetary Affairs Commissioner Joaquín Almunia praised Slovakia’s economic convergence, as well as the changeover process in Malta. He commented, “Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January, 2009.

Following Slovakia’s eurozone endorsement, the Commission is to ask European Union finance ministers and other leaders to approve Slovakia's membership bid in June and July, when they are expected to fix an exchange rate between the Slovakian koruna and the euro.

Speculation is that Slovakia will very likely be the last of the new EU12 to take on the currency this decade, as other eastern European states curb their euro plans rather than strain to shape up their public finances.

Of the 10 countries receiving their eurozone convergence reports - Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden – only Slovakia was given the green light after it was found to have met all the criteria for euro adoption – inflation, public finances, interest rates and exchange rates.

Top of the Props – April 2008

Jaimie Kanwar — 09/05/2008 00:00:00

Interest in the United Arab Emirates from visitors to TheMoveChannel.com has soared over the last month, with the progressive Federation breaking into the top ten of our ‘Top of the Props’ chart for the first time…

Never content to rest on its laurels, the UAE’s defining characteristic seems to be its unshakeable quest for continuous improvement – something that has underpinned the success of States like Dubai and Abu Dhabi. And with major infrastructure investment occurring across the Emirates, it’s an exciting time for prospective investors.

Elsewhere, the titanic struggle at the top of chart between Europe’s heavyweights continued, with Italy, France and Spain shuffling places once again, and a new number 1 taking over. Far flung destinations continued their march up the chart, with two exciting emerging markets consolidating their positions in the top 10.

To view the complete chart, along with analysis and expert comment, please visit: http://www.themovechannel.com/articles/viewpoints/108-5-1.asp

You can also view the very latest global investment opportunities on our Property Investment Portal

Slovakia ready to join the party

Jaimie Kanwar — 08/05/2008 00:00:00

Slovakia has been given the green light to adopt the Euro…

Slovakia is the first former communist country in Eastern Europe to pass the criteria for the single currency, and a final decision will be made in July.

Slovak Prime Minister Robert Fico enthused: “This is a great opportunity, and we consider the adoption of the euro to be the continuation of the success story that began with the entry into the European Union.

Slovakia's economic success stems from a flat tax rate and a clamp-down on abuse of its welfare system. In 2007, its economy grew by more than 10%.

A spokesperson for the European Central Bank commented: “Slovakia has met the necessary benchmarks, but there is a slight concern over inflation. Strong economic growth will bring improved living standards but also higher price levels”.

Poland, Hungary and the Baltic states are unlikely to join the euro until well after 2010.

Bratislava: Slovakia’s shining light

Jaimie Kanwar — 01/05/2008 00:00:00

A new report reveals the continued strength of the Slovakian property market …

According to a compilation of official and private-sector statistics by the Global Property Guide, Cyprus has achieved almost 32% growth in residential property prices over the last year.

A spokesperson for Global Property Guide commented: “Slovakia has seen continued price rises. Land prices in Bratislava increased by an average of 50% in 2007. The price of residential apartments also rose strongly.

“Strong economic growth, continued foreign investment, a burgeoning mortgage market, and a shortage of new developments, are all contributing to Bratislava’s performance, which looks likely to continue at least next year.

And the next country to suffer is…?

Jaimie Kanwar — 29/04/2008 00:00:00

An expert predicts which part of the world is next in line for a property downturn…

According to Barbara Knoflach, chief executive of German fund house SEB Asset Management and manager of the €7 billion SEB ImmoInvest fund, Scandinavia and Eastern Europe are the next most likely contenders to follow the UK into a property downturn.

Ms Knoflach explained: “The Nordic region will see a very sharp outward move in yields and the Eastern Europe markets will follow. Yields dramatically going upwards will level off the number of new developments.

“Both regions have experienced unsustainable yield compression in recent years. Indeed, several mature Central and Eastern European markets such as Poland and the Czech Republic have already seen yields move out by up to 2% in some areas.

“Germany, France and Italy, heavily regulated and at a different stage in the cycle, will not suffer so badly but will not be able to escape a wider economic slowdown. Spain is also at the sharp end of the property correction but a series of structural issues and in particular contagion from a residential property correction set it apart.

‘Tigerish' Slovakia challenging China

Jaimie Kanwar — 28/04/2008 00:00:00

Slovakia is a 'tiger economy' at the heart of Central and Eastern Europe...

GDP growth rates have been challenging those of China over the last few years and the economy shows no sign of slowing down.

Slovakia has a flat tax rate of 19%, this and other economic reforms have helped attract a huge amount of investment into Slovakia, creating jobs and boosting the economy.

The property market, in the lead up to the EU, was very strong, but has since not performed to the same standard as the wider economy. Growth rates have been around 10% per annum on average over the last three years. The lack of stellar growth has been partly due to an oversupply of property in The City.

The rental market also has been very weak with yields down to around 2–4%. Finance for foreigners is good but not great. Typically 70% LTV mortgages are obtainable with 25-year terms and interest rates typical to most EU countries 5–6%.

Overall, Slovakia is underpinned by very strong fundamentals, which would suggest this will eventually filter into the property market. When it does - expect prices to take off substantially.

Slovakia: Property investment snapshot

Jaimie Kanwar — 22/04/2008 00:00:00

The latest news from the Slovakian property market…

According to the Slovak Statistical Office, economic growth in Slovakia in 2007 was a record breaking 10.4%. The average monthly wage in 2007 came to SKK 20,146 (622.08 EUR), a 7.2% y/y increase. Real wages (inflation adjusted) increased by 4.3%.

* * *

The ratings agency Standard & Poor has changed its outlook on Slovakia from stable to positive amidst expectations of euro adoption in 2009. S&P's affirmed Slovakia's "A" sovereign credit rating and raised to "AA+" (from "AA") the transfer and convertibility assessment of the country.

S&P stated: "In conjunction with the strong currency and moderate inflation rate, Slovakia is expected to satisfy the Maastricht criteria for EMU (European Monetary Union) membership"

* * *

Slovakia's central bank (National Bank of Slovakia) predicts economic growth in 2009 to exceed 7% - a slowdown from the last couple years but still an extraordinary figure given the situation in the EU and US.

The Bank also believes that the Slovak economy is optimally positioned to ride out the global economic slowdown. Accordingly Slovak GDP growth is expected to be over 8% and 7% in 2008 and 2009 respectively, compared to the EU and US which may barely register more than 1-1.5% growth.

* * *

According to data from the Department for Tourism at the Ministry of Economy, income from inbound tourism was SKK 3.99 billion (121.7 million euro) in January, a y/y increase of 18.8%.

News compiled in conjunction with Slovakian Investment Property

Euro joy for Slovakia

Jaimie Kanwar — 17/04/2008 00:00:00

Slovakia has met one of the main criteria required to join the single European currency…

Figures from the European Union showed that the average inflation rate during the year to March was 2.2 per cent - well below the accepted limit of 3.2 per cent. This is a positive development for the Eastern European country, which is aiming to become a member of the euro at the beginning of 2009.

The decision regarding Slovakia’s entry into the single currency will be decided by both the European commission and the European Central Bank. However, the bodies need to consider whether this rate of inflation is likely to be sustainable during the next few years.

Robert Fico, prime minister of Slovakia, was quoted as saying: "Today there is no reason to doubt that the Slovak Republic would be able to secure good state of public finances but also the rate of inflation in the upcoming period."

The country became independent in 1993 and joined the European Union 11 years later.

CEE property markets ‘will survive’

Jaimie Kanwar — 17/03/2008 00:00:00

Eastern European property markets will ride out current global turmoil, claims Property Secrets…

The big question for property investors in Central and Eastern Europe is how can these economies weather the global economic slowdown and what effect is that going to have on property markets?

Despite recent headlines based on forecasts from the World Bank and the European Bank for Reconstruction and Development, Property Secrets predicts that the effects are actually likely to be mostly benign.

Robin Bowman, Property Secrets’ Editorial Director, said: “There are fundamental reasons why the key economies of Slovakia, Romania, Poland and the Czech Republic can ride out this global economic slowdown. Their economies are incredibly strong going into the slowdown and, although we will see a slowing of growth, it will not be excessive.

“This is exactly what many of the CEE economies need – especially Romania and Bulgaria. Basically, a slowdown was coming anyway. This way it may well come before we see property markets, as well as whole economies, becoming dangerously over-heated.”

Growth momentum

Poland's economy grew at 6.5% in 2007, the fastest for a decade. Romania will be somewhere around 6%. Bulgaria is expected to be 6.2% and the Czech Republic around 6%. And the truly outstanding Slovak Republic is expected to have grown by 9% in 2007.

These impressive figures are a measure of just how much growth momentum there is in these economies. But with such pace usually come some negatives, most notably inflation and current account deficits, which of course have to be financed somehow.

And just as the mighty US deficit needs foreign cash to support it, so do those CEE economies with big deficits. That cash is likely to become increasingly harder to attract as investors look for safety. That means it'll cost more.

Already we have seen some of the effects of this as some CEE currencies have weakened - the leu in particular is down around 20% against the euro in six months. If you're a Romanian with a euro linked mortgage, that can't help but hurt.

This may sound bad but it needs to be put into perspective. The European Bank for Reconstruction and Development has cut its 2008 growth forecast for Eastern Europe to 5.0-5.5% from 6.1% entirely due to the global credit crisis.

Extra economic security

Robin added: “Even a GDP growth rate of 5% would be great so a forecast of 5.5% is hardly a disaster.
“Put it into context - let's be optimistic and assume the UK makes 1.5% this year. What about the US? 1.5%, 1%? Anyone's guess really - but few would bet on much more. Germany, France - are they really likely to do better than 1.5%? Italy will barely register any growth. And Spain's GDP growth rate is almost certain to plummet.”

And the EBRD points out something that Property Secrets has long argued: ”That these economies...are less vulnerable than other emerging economies because they benefit from the extra economic security offered by European Union membership. Investors assume greater risks than elsewhere because membership brings clear development perspectives and outside financial scrutiny.”

That's the key difference with these markets. And it's the one that Property Secrets predicted would make all the difference to property investors back in 2003 when it first published Eastern European Property Secrets.

In 2008, Romania will receive almost $1.5 billion in EU structural funds to improve its infrastructure. This is the kind of backing that last year drew net investments of €460 million into the country's stocks and bonds markets - more than twice the previous year's net sum.
Overall, foreigners bought €2.36 billion worth of Romanian stocks and bonds, up from €1.123 billion the year before. And the net the balance shows people and funds are buying and keeping their money in.

Turbo-charged growth

Turbo-charged growth is seen everywhere you look. Mortgage penetration rates relative to GDP in all these countries might still be low, but they are growing at staggering rates of 50% and more.

Bulgaria's mortgage market grew by 64% in 2007. The size of Poland's market increased by 50%. The Czech market grew in value by 41%, year-on-year, in 2007. When you see growth rates of this ilk - doubling, even 50% growth - it's almost certainly time for a period of more measured growth.

A slowdown of a few percentage points in overall GDP growth is exactly what most of these economies need.

A slowdown will allow the Polish government to continue saying 'no' to inflationary wage demands from public workers, as it is currently doing. A slowdown will enable the huge wage rises we've seen in some sectors of the Romanian economy slow and fall more in line with raised productivity, allowing the country to be competitive on salaries for longer.

Robin added: “Although the huge growth we've seen in property prices will probably slow – they will be more healthy and stable in the longer term. For property investors, eyeing the longer term is far better than a blistering pace right now.”

Slovakia’s ‘staggering’ growth

Jaimie Kanwar — 10/03/2008 00:00:00

Slovakia's economic outlook for the next few years is ‘positive’, according to a new report by the World Bank on new EU members...

This comes as no surprise given Slovakia’s continued economic growth. Petra Gajdosikova, Managing Director of Slovakia Investment Property, commented: “After 9.4% growth in the third quarter of 2007, economic growth in the last quarter reached a staggering 14.1%. The Ministry of Finance estimates the GDP growth in 2007 at 8.9- 9%”.

Recent IMF and OECD reports praise the Slovak economy and rate it third best in business climate within the EU, just behind Ireland and the UK. A Government spokesman recently commented: “The government expects to decrease the fiscal deficit below 2% of GDP in 2008, as compared to the original target of 2.3%. It is likely that the deficit in 2008 will be around 2% or below. Our ambition is to decrease the deficit below 2% of GDP.

In other good news, the Slovak crown reached a historical high against the euro, with the SKK/EUR exchange rate at 32.44, as of Feb 29 2008.

Buying Property in Eastern Europe

Jaimie Kanwar — 11/02/2008 00:00:00

The essential guide to purchasing property everywhere from the Baltic to the Balkans…

Hosted by Webooks.co.uk, “Buying Property in Eastern Europe”, is written with the serious investor, second-home buyer and permanent relocator in mind, and covers 13 countries, including: Turkey, Croatia, Bulgaria, Poland and the Czech Republic. This title offers advice on everything from property legislation and taxation issues, to where and what to buy and how to adjust to the culture shock of living out east.

Visitors can read the whole book for free online, or download a PDF from the online shop for future reference.

Author Leaonne Hall is an expert on the overseas property market and has written extensively for a number of newsstand titles. She previously produced three editions of the Red Guide to Buying Property in Eastern Europe, and has been writing in detail on the individual markets since 2003.

On the Webooks website, users can also read the author’s blog and find useful websites in the directory.

With over 200 Webooks set to go online during the remainder of 2008, visitors can also sign up to the newsletter to receive alerts when new titles are added to the online library.

You can read the book on the WeBooks website below:
http://www.buyingpropertyineasterneurope.info/

Webooks
http://www.webooks.co.uk

TOP OF THE PROPS: Portugal ‘on the crest of a wave’

Jaimie Kanwar — 08/02/2008 00:00:00

Interest in Portugal from visitors to TheMoveChannel.com has soared over the last month, with the stunning Iberian paradise crashing into the top ten to take the number 5 slot in our ‘Top of the Props’ chart…

After steady growth in 2007, 2008 is expected to bring a healthy 12% growth to Portugal’s property market, and with the double tax arrangements between the UK and Portugal, buying property has never been so simple for overseas investors.

There was a surprise at the top of the chart, as the top dogs created a situation that has never been seen before in the Top of the Props chart!

Cyprus and Brazil continued to rise steadily, but the most impressive rise of the month came from a small country in SE Europe, which is surprising investors with its rising property prices and excellent investment potential.

To view the full Top of the Props chart, which ranks the top 40 countries, please visit:

http://www.themovechannel.com/articles/viewpoints/108-2-1.asp

To view current opportunities in the Bulgarian property market, please visit:
http://portugal.themovechannel.com/property

Expats ‘buoyed’ by Bratislava

Jaimie Kanwar — 07/02/2008 00:00:00

Bratislava is becoming a haven for savvy investors…

The following excerpt is taken from The Foreigner’s Guide to Living in Slovakia by Margarete Hurn, and outlines some of the best places to invest in Bratislava…

The population of Bratislava is approximately 450,000 and is separated into five districts. The following are descriptions of particular areas in each district and details to consider when choosing a place to live:

Staré Mesto – (city center)
The “Old Town” consists of the historical center and the area just below the castle. It’s a very popular area with the expatriate community. Its positive points are that everything is within walking distance and it has good public transportation connections. Its shortcomings are the lack of public parking as well as the fact that it boasts of some of the most expensive property in Bratislava.
Ružinov, Vrakuňa, and Podunajské Biskupice – (east and southeast)
Ružinov is another area popular with “expats” as it has good public transportation access and is rather an attractive neighborhood. Most of the possibilities for accommodation are in apartment blocks. The area within Ružinov that is more populated with residence housing is called Prievoz.
Karlova Ves, Dúbravka, Lamač, Devín, Devínska Nová Ves, and the village Záhorská Bystrica – (west)
Karlova Ves is located in the northwest of Bratislava and is desirable to many expats looking for a house or an apartment, particularly for those who have children attending either of the two international schools that are located in the area. It is an attractive area with many tree-lined streets and a surrounding forest.

IMF: World economy in 'turmoil'

Jaimie Kanwar — 04/02/2008 00:00:00

The International Monetary Fund (IMF) has warned of impending ‘global economic slowdown’…

But the revised predictions are still well short of being a global recession. The IMF's chief economist calls it a significant global slowdown. For the major developed economies, the IMF predicts continued, but much weaker, growth this year.

The new forecast for global economic growth this year is 4.1%, after nearly 5% last year. There is a very sluggish period ahead for the main rich countries. By the final quarter of this year, annual growth in the US will be below 1%, according to the IMF.

Developing economies are predicted to grow more slowly than last year, though still quite robustly in many cases. The report also warns of risks from financial market turmoil, which could mean 2008 turns out worse than its main forecast.

Those problems could affect spending in the rich countries and make for more significant spillovers to developing countries. In any event, the IMF's economists said that talk of de-coupling - the idea that the world is independent of what happens in the US - was "greatly exaggerated".

One exception to the pattern of slowing growth in the forecast is Africa. IMF economists say that reflects high prices for many of the commodities exported by African countries, improved economic polices and the fact that the continent is less exposed than Asia, for example, to problems in international financial markets.

Slovakia set for price bonanza

Jaimie Kanwar — 18/01/2008 00:00:00

Euro adoption could lead to a boom in prices in the Slovakian property market…

People who buy property in Slovakia before January 1st 2009, when the currency is set to be adopted, could therefore see a healthy return on their investment.

"The way the market’s going now and just on the psychology of the market, prices will continue to exceed expectations up to adoption [of the euro]," said Carl Dear, investment strategist with Offplan Millionaire.

"And prices will continue to exceed expectations for approximately one and a half to two years after euro adoption itself."

At the current time, Mr Dear pointed out that the town of Trnava is the fastest-growing location in terms of property prices, with a lot of foreign investment being targeted there. He also said that big cities such as Bratislava would be a "good bet" for Slovakian property investors.

Buyers bemoan flights rip-off

Jaimie Kanwar — 09/01/2008 00:00:00

Brits investing in property investors are being faced with increasingly expensive flights…

Firms are charging extra fees for items such as luggage check-in adding as much as £28 to ticket prices, Which? found. Ryanair said charges were discretionary and largely avoidable, while Easyjet said the consumer group misunderstood the business model of budget airlines.

Ryanair reported passenger numbers up 18% in December on a year ago, while rival Easyjet saw numbers climb 9.9%. However, shares in Easyjet were trading 12% lower in late morning trade at 471p after its load factor - which denotes the number of seats sold as a proportion of total seats available - fell to 78.9% in December, down from 81.2% a year earlier.

Ryanair shares dropped 6.4% to 3.81 euros. Its latest update, released on Friday, had shown its load factor dropping to 79% in December from 81% the year before.

Misleading practices

Which? Argued that Budget airlines have been increasingly charging for services that in the past have been included in the price of a ticket. According to Office of Fair Trading (OFT) rules, airlines must include taxes and other compulsory charges in their headline prices.

"If these costs are genuinely optional then we would not generally object to them being displayed separately, provided they are clear to consumers," said the OFT.

But the watchdog said if any of these charges were not optional and airlines advertised flights as "free" (or used a similar statement) or implied that consumers did not have to pay any extra charges then "this is likely to be misleading".

Ryanair was seen to charge the highest extra costs, by adding a £4 fee for checking in at the desk instead of online, and £20 for checking a bag into the hold. Priority boarding cost an extra £2 per flight - it was only free for passengers who checked in online and had no bags for the hold.

Ryanair said it wanted to encourage passengers to travel with hand luggage only and to check in online. The survey said overall total extra costs, including credit card charges, could be as much as £32 in Ryanair's case, just under £30 for Easyjet and just under £25 for BMIbaby.

Unfair charges

Monarch Airlines, which in November was the latest firm to start charging for checking in baggage by setting a £3.99 fee per item, was seen to charge as much as £23.50 on top, while Flybe's total extras totalled were around £23.

A Which? Spokesperson said: ‘We have spoken to the Air Users Transport Council, and they have said that nothing stops airlines from adding extra costs, but it would look into the issue. We think Ryanair's charge to use its check-in desk is unfair. You can only avoid it if you don't check luggage into the hold".

Eastern Europe and the 'Palin effect'

Jaimie Kanwar — 02/01/2008 00:00:00

Eastern European tourism has surged as a result of a BBC TV series…

Former Monty Python star Michael Palin recently launched a new series depicting his travels across countries behind the old Iron Curtain, including Bosnia, Slovakia and Albania.

This prompted Daniel Pawlyn of adventure holiday website Intrepid to predict that this will heighten interest in these countries among Britons.

He commented: "The great thing about the way Michael Palin travels is that he really gets under the skin of a country; travelling on local transport, staying in traditional accommodation and generally doing what the locals do."

Mr Pawlyn cited the broadcaster's previous expedition to the Himalayas, which contributed to a surge in the number of people visiting the Asian mountain range.

Many of the destinations covered by the TV programme include areas that have already become emerging hotspots for overseas investors, including Romania, Poland and the Czech Republic.