Does anyone have any feel for the current and potential impact of the meltdown in the global motor market on Slovakia which of course has been a major beneficiary up to now of motor manufacturers relocating there? I guess it could work both ways - a major reduction in output and therefore jobs or alternatively more companies moving production to a cheaper location.
Huw

Hi Huw,

I work for a 1st tier automotive supplier with a headquater in Germany and several plants around the world. One major production center is in Slovakia and the current Management decision is something like "wait and see" but the forecast are done with a 20% demand reduction for 2009.
Consequences: our Group decide to reduce the production mainly in western europe and will keep the maximum "possible" charge in Slovakia because of the cheaper labour costs there.

All in all the economical crisis is not good for sure and could be desastrous if it last to long and remain too acute (with very low orders of new cars from the consumer market). But for the companies who will eventually survive, they will not reconsider their global strategy and Slovakia will remain in good position as long as the labour costs remain competitive.

We do not expect any major redundancy in Slovakia for the reason above.

Hope this help.
Chrism

Hi Chris

Thanks for the inside info. That was the reply I was hoping for - let's hope that's what happens! I have a feeling we're in for a long haul particularly after the balls up of a budget yesterday.
Huw

Im an expat (landlord) living in Trnava (home to Peugeot and samsung),and people here are certainly starting to feel the effects of economic slowdown, peugeot have already announced a 4 week shut down at christmass and are shedding agency jobs, as are samsung. The secondry suppliers are definatly feeling the pinch with reduced orders, and slimming their workforce.
Most slovaks tend not to relocate permanantly ( very family orietated) they will comute and go home for the weekend to the middle or east of slovakia,(pergeot have even had to recruite Bulgarians/Romanians to fill vacancies). which is good for cheap rental (but not luxury as most of the french managers have gone home)
If your buying now, do it only if you can fund it yourself for the next couple of years. Prices are falling, but rental income may be a bit slim while unemployment rises.
However, these companies arn't going to up sticks overnight they have tax breaks for the next 5 or more years. They will most likley shut older western plants fist so still a good long term investment.
Best thing ive heard is J.T Global have reduced the 1st Phase of their Bratislava danube development ( River park ) By 40%........ Id sure as hell buy if i had the cash "prime capital city center, river view for Trnava prices - £2000 pmsq" Goos luck to all who sail in here.

Interesting comments - particularly as I have an apartment in Trnava near the peugeot factory.

How far do you expect prices to fall over the next couple of years?

Can anyone tell me what the capital gains tax position is in the UK given that the CGT rate is 19% in Slovakia?

Regards

Sanj

Hi Sanj

You dont actualy have CGT in slovakia, VAT at 19% is payable as a non resident if you sell a rental property within 5 Yrs, or 3 yrs if you did not rent it, and say only you lived there.
Prices here have probably slid around 10% acording to the property mags, but at the moment its really more of a stagnation of prices, not a collapse.

Slimsedq

I've been speaking to a couple of agents recently who have confirmed that the rental market is weak due to an over supply of new builds in the area and as we know prices are falling (largely due to lack of finance).



Can anyone recommend any reputable local agents worth talking to?

Regards

Sanj

Hi Sanj,

I would definatly agree with the over supply in bratislava,
(and god knows the affect on markets when the 1st wave of forigne investors start flipping there properties come the magic 5yr mark from purchase , so thats starting 5yrs from joining E.U - when the sale's becomes vat excempt)

However, over supply isn't that bad in trnava there has only been 5 large developments completed with five going up, compared to over 200 in Bratislava

So im guessing your places is either on the corner by ZOS heading up to pergeot, or the dual build on Druzba (Dendranex), the former has a lift , and is a bit more luxurious.
I have 1 myself on druzba, plus an old commy built flat elsewhere in the town, both are rented through word of mouth.
I only use an agent for Bratislava, however 2 very good estate agents in trnava, who i have delt with ( in Buying) are streal.sk and realfinanc.sk. they both have a shop on the high street, and advertise well locally, and run very much like a uk agent, which is more than i can say for some.

I get 500 euro a month for a 1 bed (or 2 room in slovakia) for the new flat, that includes all their charges and energy, so net 350, which is good.

Im not after top whack, which some agents push for ( though thats a way of life here- get the most you can), remember its beter to drop it 50 euro than have it empty for another month.

hope that helps, and if you get tapped for any bills you think are a bit high, im happy for you to run them by me, and ill tell you the going rate! sedgwick@edoma.sk, or via this forum.
Good luck
Slimsedg

Hi Slimsedg
your views are very interesting to read.
I bought in Sered, Meander project. Do you know anything about this?

Slimsedg

I have an apartment at 3 Towers and would either like to rent or sell. From what you say if i sold within 5 yrs i would pay no CGT as i have allready payed the 19% VAT, however if i did hold for 5+ yrs i would pay no CGT on any profit or have to charge vat so affectively if no growth at all i would make a 19% gain, is that correct ?
Do you know of any good agents for either sale or renting in Bratislava ?
Can you reccomend what banks for mortgages.

Regards

Rob