29th April 2021

Prices of new and old flats are still rising, the rental market exceeded expectations

Prices of new and old flats are still rising, the rental market exceeded expectations

Comparison of Q1 / 2020 and Q1 / 2021

At the beginning of the year, there was a shortage of older flats on the largest Slovak real estate market. That is why their prices have grown faster and they are catching up with the prices of new flats. The new construction market again recorded its new highs. In the case of leases, in the first three months of this year, the number of concluded leases increased significantly. This follows from the data of the real estate agency Herrys, which is the largest real estate agency on our market with more than 800 transactions per year.

Older apartments are still on course

Compared to the first quarter of 2020, Herrys recorded a significant change in client behavior in the first three months of this year, in the form of greater interest in buying and renting apartments. January and February last year were marked by low supply and the corona crisis fully manifested itself in March. There was great uncertainty in the market and all sectors of the economy reported unfavorable forecasts.

"In the first quarter of this year, we observe that despite the unfavorable development of the pandemic, the uncertainty of the applicants has certainly subsided, the behavior of clients has changed, as well as the functioning of institutions. In the first three months of 2021, we recorded 60 percent more bookings in our company than last year, "says Filip Žoldák, founding partner of Herrys, which monitors the development of the real estate market in detail. According to Herrys, the total volume of real estate sold in the first quarter of 2021 is 40 percent higher than last year. The supply of flats shows a long-term declining trend, which is also reflected in rising prices. In the first three months of 2021, prices rose by three percent and were at the highest level since 2009. The average gross price per square meter for older apartments reached the level of 3,160 euros.

According to internal data from Herrys, most clients bought real estate for their own housing at the beginning of the year, and only a fifth of apartments were chosen by the buyers for investment. Banks still played an important role in financing the purchase, with up to 59 percent of the total number of completed transactions being financed through a mortgage loan. The rest were bought by interested parties from their own resources. According to the company's statistics, the banks provided a loan of 78 percent of the value of the mortgaged mortgage clients. Buyers had to cover more than a fifth of the price from their own resources. In terms of locations, according to Herrys, flats were sold the most in Bratislava's New Town (36 percent) and Ružinov (31 percent), and the greatest interest was in two- and three-bedroom flats (both 33 percent each), with the average price of real estate sold without a garage. reached 208 thousand euros.

"In March this year, the offer of flats for sale on the secondary market was the lowest in the last six months and their prices tend to get closer and closer to the prices of new buildings. This trend will continue until more new flats start to be added in Bratislava. The current difference in the prices of old flats and flats in new buildings is on average 13 percent, but in the Old Town, for example, it is up to 20 percent in some categories, in Petržalka it is on average 4 percent, "explains Filip Žoldák.

Year-on-year, the prices of new buildings in selected localities also grew in double digits

In the first quarter of 2021, new flats became more expensive in the last 18 months. "Compared to the last quarter of last year, those interested in housing in the new project will pay an average of almost 300 euros per m2 without VAT. The average price of m2 without VAT exceeded the limit of 3,000 euros. The difference in price between completed flats in new projects and flats under construction is approximately 14 percent, "says Filip Žoldák. The average price of apartments under construction is almost 3,150 euros per m2 without VAT. Flats in Dúbravka, Karlova Ves and Petržalka became the most expensive year-on-year, where the year-on-year surcharge represents an average of EUR 500 per m2 excluding VAT. New buildings in Ružinov became the most expensive, where the price for the year increased on average by approximately 100 euros per m2 without VAT.

Price per square meter in new buildings in Bratislava districts


The sharp rise in the price of flats in the first quarter is a picture of investor confidence in the so-called "Beton gold", especially in the premium locations of the Old Town and Mlynské Nivy, where the expected projects will further strengthen this trend. "The increase in construction costs, the small supply, the shortage of construction workers, together with the increase in prices in the center, will also pull up prices in other localities, as has been the case so far. Developers' confidence in housing is strengthened by the availability of financing and the willingness of buyers to borrow, which can only be changed by a willingness to exchange their own housing for rent. It is more likely that the age category of future buyers will increase with prices and banks' demand for own resources. Therefore, the first own housing will no longer be a small start-up apartment, but effectively designed family 3 + kk apartments, “says Filip Žoldák.

The rental market indicates a positive development

In a year-on-year comparison, the beginning of 2021 was also busy in the rental market. Demand was rising significantly, which was reflected in the number of leases. Real estate agency Herrys signed 107 leases in the first three months, which is an increase of 44 percent compared to the first quarter of last year.

"The increase in the number of completed transactions on the rental market is a reflection of both the recovery in demand this year and the overall impact of a wider supply of rents in terms of year-on-year comparison. During the fourth quarter of 2020, when demand was weaker, the supply of rents accumulated. Thanks to this, the results in the first quarter of 2021 are significantly higher than in the first quarter of last year, "says Martin Marsina, a partner at the Herrys real estate agency.

In the case of rentals, the capital was most interested in real estate in the Old Town (38 percent), Ružinov (33 percent) and in the New Town (27 percent). Tenants showed particular interest in two-bedroom apartments, which accounted for more than half of the contracts concluded. There was less interest in three-room (19 percent) and one-room apartments (13 percent). The average amount of rent reached 615 euros per month at the beginning of this year.

"Currently, the situation on the Bratislava rental market is improving and anti-pandemic measures are being relaxed. Also in view of this, we assume that leases will be more active in the second quarter. We also do not rule out that rental prices may have an increasing tendency, "concludes Martin Marsina.