This year represented something of a hand-brake turn for residential buyers in the grandee American city. Following price rises and bidding wars during much of 2016 and 2017 (a rise kicked off since 2012), and little new housing stock, brokers cited a new category of house hunters happy to wait-and-see.
So influential was this swathe of caution that spring-season price growth was flat, according to data from Houwzer and Philadelphia’s Recorder of Deeds. Second quarter growth slowed considerably against that of the previous year, counter-acting the forces of low supply and decent demand.
Rising mortgage costs could be a factor – economists cited the almost 1 per cent increase in the average 30 year mortgage since January that may have seen fence-sitters simply do the maths. This is arguably in line with a national picture – price growth decelerated in 66 per cent of markets (Attom Data Solutions).
The question is: what next for 2019? Economists expect Base rates to increase further, while others see this year as a blip as sellers drop prices just to divest.
Real estate this year has been dynamic. The first phase East Market, a three-partner mixed use development in Center City, was launched, while tax-friendly Opportunity Zones are wooing SMEs. What will be city’s largest residential building – The Laurel – is also at rendering stage.
In an interesting legislation development, the city agreed in September to overhaul the laws relating to seizure of property when the owner is suspected of a crime. It was originally alleged that the process does not demonstrate due process to the defendant, and a potential conflict of interest.
Bratislava is a curious one in terms of real estate. While the supply of residential city centre apartments is typically a factor in fluctuating price, it is almost completely steady in the Slovak capital, while prices come and go over multi-year periods.
This is because the post-communist residential building market never really established itself in the city, particularly compared to nearby Czech and Austria. New-builds have been typically developed by municipalities focused on social housing, though even the volume of this sector has fallen from 2,305 in 2009 to 359 in 2016, according to Slovakia’s Supreme Audit Office. That’s 359 across the whole country.
The capital is in a slowing phase in terms of price – rising just 3.84 per cent in this year’s first quarter against the previous year after roughly 8.5 per cent rise in 2016, according to the National Bank of Bratislava. Bratislava’s prices far outstrip any regional rival on the country, with older, two-bedroom apartments around EUR 2,440 per square metre. This compares with between EUR 1,500-1,600 averages in Kosice and Trnava. Prices are expected to soften further in the capital this year following a tightening in mortgage requirements from the central bank. However, there are few restrictions on foreign ownership of property.
The retail does well due to robust wage growth and relatively low unemployment. Indeed, the city has more retail focused space compared to regional capitals, and more is to come: since last year around 180,000 square metres of retail space are under construction, mostly shopping malls, Colliers International data show. The industrial and logistical sectors also do well, with automotive and e-commerce two sectors that have developed following foreign company investment.
Economic growth is estimated at 4 per cent in 2018, up from 3.4 per cent in 2017.
‘Best in the UK’ is a useful moniker to have as the country continues to sell its business-as-usual front in the wake of Brexit debate – even better when global investment capital into the UK is in fact growing (JLL figures).
House prices in the red-brick city rose 7.7 per cent this year, according to Hometrack, ahead of Edinburgh (7.4 per cent), and the much-vaunted power houses of Manchester and Birmingham (6.4 per cent and 6.2 per cent, respectively). This compares to the UK capital losing 0.4 per cent over 2018 and underlines a common theme for foreign buyers – look beyond the capital, and the growth potential changes completely.
The Midlands city has done so well in the last few years that it’s less a case of “one-to-watch” and more, “one-you-should have been watching”. But the present, positive story continues – so it’s not too late.
The city echoes the strong price rise generally across the East and West Midlands area – JLL found that these two areas lead the country for forecast price growth this year and over the next two.
Brokers talking to local media say that while the gap between asking prices and offers are narrowing in a number of cities – indicating a rising market – in Leicester, this is a differential of just 2.8 per cent. So while prices reduced following the 2016 referendum vote, they continue to rise overall.
Home.co.uk found that there are 785 houses between £100,000-200,000 and 657 between £200,000-300,000. Both brackets have an average listing time of 135 days.
The East Midlands also competes strongly in the Big Box industrial & Logistics market – around 45 per cent of the uptake in Grade A space this year occurred in the region.