Attraction of apartments in Bratislava as rental investment declines

26. Jul 2022 at 6:55 am I Quality content

The main reason? The sharp increase in residential real estate prices.

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Buying an apartment and then renting it out has become a popular strategy among Slovaks who have savings they want to protect from depreciation and want to earn some extra money at the same time. However, the sharp rise in residential real estate prices is increasingly pushing returns away from these investments. Bratislava is one of the hardest hit localities in Europe by this measure.

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“The payback period for investments also increased significantly in Bratislava, from 26 to 31 years, with the price of apartments for rent in the city center increasing by 10%,” said Lucia Žárská, chief analyst at ProfitLevel, a full service provider. investment service.

Its latest European survey on the sale prices and market rents of a one-bedroom apartment in the city center (50 square meters), covering urban tourist destinations in the Mediterranean and Central Europe and carried out during the first half of 2022, shows that among the locations, the recovery horizon extended significantly in only one other city – Krakow, from four years to 29 years. On the other hand, he has hardly evolved in Budapest (30 years old) and in Warsaw he is down to 27 years old. The longest returns in Central Europe are in Prague (over 35 years) and Vienna (almost 39 years).

“The first half of the year in monitored European destinations, with a few exceptions, brought further growth in prices for apartments suitable for investment,” Žárská said. “However, market rents were not sufficient in most cases, and in some cities they even went down. As a result, the payback period for funds spent by the owner to purchase the apartment is even longer.

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The longest return on investment for an apartment bought to rent is in Munich, where it exceeds 40 years, followed by Dubrovnik, Croatia with 39 years.

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Keith P. Plain