As Slovakia continues to recover from the economic downturn house prices appear to have bottomed out, and are down 15.8% from their peak prices. Property increased in value here from 2006 to 2008 with rises averaging from 14% to 35% annually. Although prices appear to have bottomed out consumer demand is still weak and may be affected by rising unemployment levels.
During the downturn in the economy contracted by 4.7% but is now recovering as it grew by 3.8% during the third quarter in 2010. Interest rates in Slovakia are quite favourable as they declined throughout 2010; however the banks remain cautious about lending. A new government was elected in June 2010 and is expected to be good news for the economy as it has promised to return the country to the high growth rates it previously enjoyed and has also pledged to reduce the budget deficit.
At its highest point the economy grew by 10.58% in 2007 and is estimated to have grown by 4.1% in 2010. While analysts believe the outlook for Slovakia is good they do not think that property prices here will increase rapidly, but that the growth will be slow and sustainable. Rental yields on property here are also quite low as although the system used to be rent-controlled it was abolished in 2005 but the decree was never implemented. It remains to be seen if the new government is willing to tackle such a sensitive issue.
Slovakia was formerly part of Czechoslovakia and is considered a very stable and liberal economy having undergone eight years of reforms under the centre right coalition which was led by Mikulas Dzurinda. These reforms earned it international praise and undoubtedly helped smooth its entry into NATO and the EU.
No comments:
Post a Comment