What is the development of the real estate market in Czechia and its South Moravian region? What are the challenges that are shaping the future of real estate in Slovakia? These were the questions discussed by representatives of major real estate development, construction and investment companies, real estate funds, consultants, property owners, and investors at the October Real Estate Forum, which we held in Brno again. These topics were also addressed at the second edition of the Slovak Real Estate Vision & Trends conference, which we organised together with CBRE in Bratislava in November.
At the Brno real estate conference in October 2024, the experts agreed that better times were ahead after the real estate market was slowed down by high interest rates and rising construction costs. Tomáš Vavřík of Domoplan even predicted that residential property prices could gradually reach the level of prices in Vienna. “Prices are bound to rise by 5-8% a year. Many developers have raised their prices, and the market will absorb that. Prices will not be lower. Whoever wants to invest should not wait for a downturn,” said Mr Vavřík. Zdeněk Vojtek of Svoboda & Williams joined in, saying: “The time is now.”
Petr Houska of OM Consulting also confirmed that the market was recovering: “Developers are dusting off older projects that have been suspended until later. The recovery of the office properties is much slower, far from the pace of residential properties.”
Petr Beránek of Nexia One Corporate Finance described a wide range of real estate investment options that need not be limited to residential properties only. “If you want passive investment, you should probably invest in a real estate fund. If you want active investment, do you need an immediate return? If you don’t, you should invest in land,” said Mr Beránek.
Hotels can also be an interesting investment in terms of appreciation. According to Jaroslav Svoboda of Czech Inn Hotel, investing in this segment might give you a return above the usual 4-6%. However, it is a long-term investment. David Nath of Cushman & Wakefield added: “Czech hotels have one of the highest gross operating margins in Europe. We’re number two after London. European performance is about 43%.” Lukáš Pytloun of Pytloun Hotels noted that hotel concepts with limited services, such as self-check-in, can even generate 60%.
At the November Slovak Real Estate Vision & Trends conference in Bratislava, CBRE’s Gábor Borbély presented the current situation on the European investment and real estate market. According to the statistics, both investment activity and volumes have been growing, with an average rate of up to 12% between 2023 and 2024. These figures are seen throughout the CEE region (excluding Russia, Belarus, and Ukraine) and the European Union.
However, Slovakia faces several challenges. It needs to deal with low housing affordability. The new Building Bill passed by the Slovak legislature was supposed to be the solution to that challenge, but before it came into force, the current Slovak government decided to revoke it and draft completely new legislation. According to Martin Vlk of HAVEL & PARTNERS, the risks of failed digitalisation and digitalised building permitting procedures have become fully visible in Czechia. He warned against Slovakia taking inspiration from Czechia when adopting the new legislation.
According to Róbert Šimončič, director of the Slovak Investment and Trade Development Agency (SARIO), which is responsible for attracting investors to Slovakia, one of the problems is that the Slovak market is not large enough and lacks a city with a million inhabitants: “A city with a million inhabitants offers opportunities to investors to which they respond. They are willing to come to other cities, but we have to give them other incentives.” Mr Šimončič therefore considers it crucial to strengthen the country’s existing larger cities by supporting universities as well as R&D.
Another topic in Bratislava was the not very optimistic demographic prospects for Slovakia. Štěpán Štarha, representing ONE FAMILY OFFICE, said that the growing segment of services for the elderly, such as nursing homes, is an investment opportunity. He also pointed out that Slovak law lacks sufficient legal institutions for property protection. “Slovak law does not allow us to effectively decide what happens to our assets. We cannot prevent our estate from being split among many heirs. And we cannot even ensure that our wishes are respected: for example, by prohibiting the sale of specific real estate,” said Mr Štarha.
As a result, wealthy Slovaks often use Czech endowment funds or trusts as a solution because they can use these structures for their real estate and other investment opportunities. Mr Štarha stressed that this contributed to greater diversification of assets, but also helped to limit geographic risks.
Real Estate Vision & Trends in Bratislava
From left: Petr Houska (OM Consulting), Leoš Anderle (Sekyra Group), Petr Vašina (Siebert & Talaš), Tomáš Vavřík (DOMOPLAN), Zdeněk Vojtek (SVOBODA & WILLIAMS), and Jiří Václavek (host)
From left: Lenka Buchláková (host), Ondřej Majer (HAVEL & PARTNERS), Martin Vlk (HAVEL & PARTNERS)
From left: Petr Beránek (Nexia One Corporate Finance), Martin Ráž (HAVEL & PARTNERS), Jana Etrych Goldscheidová (JEG Advisory & Investments and Papež & Goldscheid Properties), Jan Rejcha (Rellox), Jiří Václavek (host)
From left: Lukáš Pytloun (PYTLOUN HOTELS), David Nath (Cushman & Wakefield), Radoslav Kobza (AD Group)
