Bratislava’s new-build market surges in 2024: Challenges and trends await in 2025
In 2024, Bratislava’s new-build market experienced a remarkable resurgence, with apartment sales more than doubling compared to 2023. This significant growth occurred despite stable average prices, highlighting the market’s strong demand for housing. However, the upcoming year promises new challenges, shaped by legislative changes and evolving economic conditions.
Sales of newly built apartments reached 1,664 units in 2024, a sharp increase from the 773 units sold in 2023, according to Bencont Investments. This growth was particularly pronounced in the fourth quarter, driven by an anticipated VAT increase from 20% to 23% in 2025. Many buyers expedited transactions to secure lower prices, resulting in a flurry of sales activity toward the end of the year.
The average price of new-build apartments in Bratislava remained unchanged at €5,013 per square meter, including VAT. Despite this price stability, analysts observed a significant shift in consumer behavior. Buyers increasingly favored smaller, more affordable apartments, which led to an 8.3% year-on-year increase in the average price per square meter of sold units, reaching €4,805. The average size of sold apartments, however, remained steady at 58.2 square meters, reflecting sustained demand for compact living spaces.
A pivotal factor behind the surge in sales was the legislative push to increase the VAT rate. Buyers were motivated to finalize transactions in 2024, saving thousands of euros on down payments and overall costs. “The savings were most significant for completed properties, with differences amounting to thousands or even tens of thousands of euros for high-end units,” explained Marian Búlik, financial analyst at OVB Allfinanz Slovensko. This urgency to capitalize on lower VAT rates spurred robust sales, particularly in the latter half of the year.
The growing interest in smaller apartments was evident in the sales breakdown. Two-bedroom flats accounted for 44% of all transactions, with Bratislava II and Bratislava IV districts leading the way. These areas offered more affordable housing options, attracting a diverse range of buyers. According to Real Estate Union analyst Vladimír Kubrický, two-bedroom flats continue to be a long-term favorite among investors, given their versatility and broad appeal.
Despite the strong demand, the supply of new-build apartments declined. By the end of 2024, the market offered 3,353 units across 96 projects, a reduction driven by rapid sales outpacing the launch of new developments. Completed apartments accounted for 37.5% of the supply, down from 43% earlier in the year, underscoring the shrinking availability of ready-to-move-in homes.
Developers benefited significantly from this surge in demand. In the early months of 2024, incentives such as free parking spaces or complimentary kitchen installations were common. However, these promotions became unnecessary in the fourth quarter as buyers rushed to secure properties ahead of the VAT hike. While demand is expected to cool in early 2025, experts predict a gradual recovery later in the year, supported by falling mortgage interest rates and continued growth in real estate prices.
Looking ahead, rising property prices remain a concern. The VAT increase is likely to exert upward pressure on prices in 2025. However, analysts believe that a steady influx of new projects could help stabilize the market. “We anticipate rising sales will be adequately supplemented by new supply, keeping base prices relatively stable, excluding VAT,” said Bencont Investments analyst Rudolf Bruchánik.
The broader economic landscape will also influence the market. While falling interest rates are expected to improve housing affordability, challenges such as inflation and legislative uncertainties could temper growth. The European Central Bank’s cautious approach to monetary easing and potential eurozone economic slowdowns may further shape market dynamics.
Another critical factor impacting the market is the functionality of key institutions, such as the cadastral registry, which plays a vital role in property transactions. According to Finančný kompas managing director Matej Dobiš, disruptions in these systems could create anomalies in the market, influencing prices and transaction volumes. “We’ve already observed shifts in loan volumes, with November 2024 seeing a significant drop compared to previous highs in March 2022,” Dobiš noted.
Despite these challenges, the preference for homeownership over long-term rentals remains strong. Rising rental costs and high demand for rental properties in 2024 further reinforced the appeal of buying a home. “Buying a home is economically advantageous in the long term, with similar monthly costs as renting but the added benefit of property ownership after 20 or 30 years,” Búlik emphasized.
As Bratislava’s new-build market moves into 2025, the focus will shift to addressing supply constraints and adapting to changing economic conditions. The anticipated stabilization of housing prices, coupled with ongoing project development, offers hope for continued market growth. However, the sector must navigate challenges related to inflation, buyer behavior, and legislative changes to sustain its momentum.
The year 2024 marked a turning point for Bratislava’s real estate market, with record sales and renewed investor interest. As the city enters a new phase of growth, the balance between demand, supply, and affordability will be key to shaping its future.
Source: Trend
Photo: Čerešne Residence II, ITB Development
