The Global Property Guide recently quoted Slovakia as the most attractive of all Eastern and Southern European countries.

This is an unsurprising fact when you consider Slovakia’s GDP growth reached a stunning 8.7% in 2006, following 5% for 2005, and 5.5% for 2004. Unemployment is down to 9.4%, from a whopping 16.5% at the beginning of 2004. This kind of growth which really pushes up house prices and supplies timely property investors with the kind of returns on investment they anticipate from such promising emerging markets.
Countries experiencing high GDP growth will experience very positive growth along with their fair share of corruption.  This is why there is always an element of risk when investing in emerging markets but, with risk will always come the greatest returns.

Today the main reasons for Slovakia's attraction are simple:

• The law is neutral between landlord and tenant
  
• The buying process costs are low at around 2.2 and 5.5 %
  
• Rental income tax is low
  
• There is no Capital Gains Tax on property held for more than 5 years
  
• The Krone has been appreciating rapidly – another source of capital gains for buyers
  

As there are no house price statistics in Slovakia, it’s hard to judge exactly what capital appreciation has been over the last few years but Andras Patkai of CEInvest has said there has been a 15% rise in prices, across the board, in the past year. Some properties increased up to 30% in 2006.  He added that these figure were guesstimates, but that they seemed to reflect reality.  Although unlikely to provide the “get rich quick dreams” once seen in Spain and Bulgaria, there is certainly money to be made in Slovakia, where the local population is in desperate need of housing”

The highest rental yields are to be found in Bratislava where average gross rental yields on apartments are at around 10%. Lower yields are available for owners of new houses in the suburbs, at around 8%.   These rental yields are being driven up by a lack of construction after the fall of Communism.  Nothing was built for around 10 years, so there is a huge local demand for quality new build projects.

Peter Mindenhall, Business and Media Manager at Propertyshowrooms.com comments:  “With these statistics in mind, given the instability in the USA and UK financial markets, those looking at diversification to protect themselves from the lackluster of what was once thought as being “safe” markets, Slovakia needs to be considered as a viable mid term investment”.