Slovakia’s housing affordability squeeze set to dominate residential market in 2026

Housing affordability is emerging as one of the defining structural pressures facing Slovakia’s residential market in 2026. Although buyer activity has begun to recover and financing conditions have improved compared with the peak of the interest-rate cycle, the widening gap between housing costs and household earnings is increasingly shaping market behaviour, investor strategy and policy focus.

European benchmarking continues to place Slovakia among the least accessible homeownership markets when measured against income levels. Comparative analysis indicates that Slovak households require roughly fourteen years of gross salary to purchase a standardised new dwelling, with Bratislava ranking among the most challenging capitals on the same measure. The trend reflects a long-term shift rather than a temporary market distortion, as the financial threshold for entering the ownership market has risen steadily over the past decade.

The affordability squeeze has been reinforced by the recent trajectory of residential prices. Official statistics confirm that dwelling prices in Slovakia still recorded double-digit year-on-year growth during parts of 2025, including a 13.4 percent increase in the third quarter. In Bratislava’s new-build segment, average asking prices reached approximately €5,600 per square metre toward the end of the year. Market evidence suggests demand has increasingly tilted toward smaller units, indicating that buyers are actively adjusting to tighter purchasing capacity.

International institutions continue to flag valuation risks. The International Monetary Fund has noted that Slovak housing prices remain somewhat elevated relative to fundamentals by some measures, while affordability indicators remain stretched compared with European peers. Although mortgage conditions have improved and banks remain active lenders, the easing in financing has not been sufficient to fully offset the structural affordability gap facing first-time buyers and middle-income households.

The impact is becoming visible beyond the for-sale market. Slovak housing policy documents highlight particularly strong demand for rental accommodation in Bratislava and other major cities, while the supply of regulated or publicly supported rental housing remains limited. As ownership becomes less attainable for a portion of households, this imbalance is reinforcing pressure in the private rental segment.

At the same time, macroprudential policy continues to reflect official concern. The National Bank of Slovakia has maintained borrower-based limits on loan-to-value, debt-to-income and debt-service ratios in response to risks in the residential market. These measures underline the authorities’ focus on containing household leverage in an environment of elevated housing costs.

Slovakia’s affordability challenge appears structural rather than cyclical. Even if price growth moderates during 2026, the accumulated gap between values and incomes is likely to remain a key constraint on transaction volumes and buyer mobility. For developers, lenders and investors, the market is entering a more selective phase in which pricing discipline, product sizing and financing sensitivity will play a greater role in determining absorption and liquidity.

Source: cij.world research & Analysis Team

Amendment to Building Act Eases Development of Corporate Solar Projects in Czechia

An amendment to the Czech Building Act that came into force at the beginning of this year is expected to simplify the installation of photovoltaic systems within existing industrial, logistics and commercial sites. According to solar developer Greenbuddies, the legislative change is already contributing to increased interest from companies seeking to generate electricity for their own use.

The amendment allows photovoltaic systems intended for self-consumption to be built on existing roofs, parking areas and operational spaces without requiring complex zoning plan amendments. If at least half of the suitable space on corporate sites were used, installations could reach a combined capacity of up to 1,000 MW, roughly equivalent to one unit of the Temelín nuclear power plant.

“The amendment to the Building Act significantly expands the possibilities for companies to efficiently produce their own electricity directly on their premises. Photovoltaic power plants intended for own consumption are no longer considered new developments, and companies can thus use not only the roofs of production and logistics halls, but also handling areas and parking lots without unnecessary administrative obstacles,” said Dan Štajner, Commercial Director of Greenbuddies.

The company noted that previous regulatory ambiguities had delayed certain projects. In 2024, a planned photovoltaic installation at a metallurgical supplier’s site in Liberec was halted due to differing interpretations of the law. Following the amendment, the project can now proceed. According to Greenbuddies, clearer and more consistent rules should reduce similar delays in the future and support broader deployment of corporate solar capacity.

Greenbuddies has implemented rooftop photovoltaic projects at several industrial and logistics facilities in Czechia, including a system at a production site in Pardubice using lightweight panel technology and an installation at a logistics park in Olomouc supplying renewable electricity to tenants. “In many European Union countries where we install solar projects, we see that simple legislation has been in place from the outset, or that countries have moved more quickly than we have in Czechia to simplify it,” Štajner added, noting that the Czech framework has now become more comparable.

In addition to rooftop systems, the amendment supports the development of solar carports, which combine vehicle shelter with electricity generation. Greenbuddies has delivered such projects in Czechia and abroad, including installations in Austria with a combined capacity of 4.67 MWp. In Czechia, the company has completed one of the early solar car park projects at a beverage production site in Prague.

The legislative changes also clarify rules for battery energy storage systems. Installations are now categorised according to capacity and grid connection. Smaller systems of up to 100 kW are treated as minor structures that do not require a building permit or final approval. Systems between 100 and 250 kW require a building permit but not final approval, while larger installations, including those connected to the transmission network, require both. Energy storage facilities above 100 kW are now classified as structures in the public interest and may be located outside built-up areas unless restricted by local zoning plans.

According to Greenbuddies, the revised framework provides greater predictability for project planning and may accelerate investment in on-site renewable generation and storage across the corporate sector.

mBank to Relocate Wrocław Corporate Branch to Infinity Office Building

mBank S.A. has signed a lease for nearly 1,300 sqm of office space in the Infinity office building in Wrocław, located at ul. Legnicka 16. The bank plans to relocate its largest corporate branch in Lower Silesia to the new premises in January 2027. The space will be situated on the fourth floor of the building and will accommodate corporate banking operations, a private banking branch and mLeasing.

mBank, which has operated since 1986 and has been listed on the Warsaw Stock Exchange since 1992, serves 5.7 million retail clients and 36,000 corporate clients. The bank maintains corporate branches and offices in more than 40 Polish cities and has also operated in the Czech Republic and Slovakia for 18 years.

Infinity is owned by Avestus Real Estate and Alchemy Properties. Commenting on the transaction, Marta Kiernicka-Szarska, Wrocław Leasing Director at Avestus Real Estate in Poland, said: “I am delighted that Infinity continues to attract such recognisable and opinion-leading brands that are leaders in their respective industries. mBank S.A. is an exceptionally strong and innovative institution that has been setting standards in digital banking for years. I am therefore confident that our development, distinguished on the market by its architecture, location and technological solutions, will fully meet the needs of the new tenant.” She added that the office would be adapted to the bank’s operational requirements and equipped with appropriate technical systems.

Kiernicka-Szarska also noted that the leasing process was based on clear expectations and cooperation between both parties. “From the very beginning of the leasing process, mBank clearly defined its expectations towards this space. Thanks to open and transparent communication and the commitment of both parties, we were able to develop solutions that fully meet the client’s needs,” she said.

Katarzyna Wiśniewska, Director of the Corporate Branch for Large Enterprises at mBank S.A. in Wrocław, stated that the relocation would consolidate teams on a single floor and support day-to-day collaboration. “In the near future, mBank employees will move into a modern office that will significantly improve working comfort and streamline daily collaboration. All teams will be located on a single floor, which will accelerate information flow and facilitate joint project work,” she said. She added that the new office would provide updated technological infrastructure and enhanced security standards.

Infinity is a seven-storey Class A office building offering 18,727 sqm of office space and 1,561 sqm of retail and service space. The building includes rooftop terraces, a lobby with indoor greenery and a digital building management platform available to tenants. It also provides a three-level underground car park with 311 spaces, electric vehicle charging points and cycling facilities.

The project was developed by Avestus Real Estate in cooperation with Alchemy Properties and has been certified under BREEAM Excellent and WELL Health-Safety standards. The architectural design was prepared by AD Studio and the general contractor was Eiffage Polska Budownictwo. JLL acted as leasing agent.

Poland: Leading Economic Indicator Edges Lower as Order Intake Remains Weak

The Leading Economic Climate Indicator (WWK), which signals expected economic trends in the coming months, declined by 0.6 points in February 2026 compared with January. The drop was modest relative to the gains recorded in previous months and does not interrupt the broader upward trend. However, weak inflows of new orders in the industrial manufacturing sector continue to weigh on the outlook.

Out of the eight components that make up the indicator, only one, the WIG stock exchange index, recorded a noticeable improvement. Four components remained broadly unchanged, while three deteriorated compared with the previous month.

The most persistent weakness remains the limited growth in new orders for manufacturing companies. Order backlogs have been shrinking for nearly two years, particularly among small and medium-sized enterprises. Larger companies have generally shown greater resilience, while producers of transport equipment are among the few segments reporting improvement. Analysts link the subdued order environment to slower economic activity in Germany and ongoing geopolitical uncertainty.

The limited inflow of new business is reflected in corporate finances. Since autumn 2025, the share of companies reporting a worsening financial position has exceeded those reporting improvement by around ten percentage points.

Business sentiment also failed to improve in February. Although January saw a temporary rise in optimism, this was not sustained as companies reassessed the economic environment.

Money supply data show that the real value of the M3 aggregate declined in January 2026, mainly due to lower deposits held by non-financial corporations. Economists note that a reduction in money supply at the start of the year is a recurring seasonal pattern.

On the capital markets, positive sentiment has continued to dominate trading on the Warsaw Stock Exchange for nearly three years and remained in place in February. However, structural challenges persist, including a limited number of new listings. In 2025, only three companies debuted on the exchange, while 15 were delisted. The market also continues to be characterised by the significant weight of large state-controlled enterprises.

Source: BIEC

Redkom Development Starts Construction of Świderek Retail Park in Otwock

Redkom Development has commenced construction of Świderek Retail Park in Otwock, a new retail scheme located in the Warsaw metropolitan area. The project will deliver more than 23,000 sqm of gross leasable area across approximately 40 units.

The tenant mix will include a food anchor operated by Lidl, alongside local and convenience operators such as bakery Wanda, butcher and delicatessen Kiszeczka, and Żabka. The retail park will also host fashion brands including HalfPrice, New Yorker, Sinsay and Worldbox, as well as footwear retailers e-obuwie and CCC. Jewellery tenants Yes and Apart are also planned.

Home and interior brands will include Agata Meble, JYSK and Dr Materac. Discount operators Pepco, TEDi and Action are expected to join the scheme, while Rossmann will provide drugstore and personal care products. Martes Sport will cover sporting goods.

Leisure and service components will include an Xtreme Fitness club and a children’s sports and education facility operated by Xtreme Kids. The food and beverage offer is set to comprise Italian restaurant Semolino, Asian concept Viet Point and a drive-through restaurant.

The retail park is being developed along the S17 Warsaw–Lublin expressway at Andrzeja Sołtana Street, near a Circle K service station. The location provides road access for residents of Warsaw’s Wawer district as well as nearby municipalities including Józefów, Otwock, Karczew and Kołbiel.

Architecturally, the scheme is designed with references to the regional Świdermajer style and will incorporate green roofs. The developer has indicated that the project is targeting BREEAM certification.

Mallson Polska is acting as strategic advisor and is responsible for the commercialisation strategy. The architectural design has been prepared by BM Architekci, while PHUB ŁUCZ-BUD has been appointed as general contractor.

Świderek Retail Park is scheduled for completion and opening in the fourth quarter of 2026.

Family Offices Prioritise Residential and Direct Investments as Real Estate Exposure Remains Elevated

Real estate continues to hold a central position in the portfolios of family offices, despite geopolitical uncertainty, regulatory pressures and ongoing structural shifts across European markets. A recent webinar held as part of the “Macro Matters – The KINGSTONE Real Estate View” series highlighted that more than half of family office wealth remains allocated to property, with a strong emphasis on direct ownership and residential assets.

During the discussion, industry representatives examined current allocation strategies, risk management considerations and structuring approaches in a changing macroeconomic environment. “Family offices operate within a stress field of macroeconomic changes and structural mega trends. What matters is how these factors are translated into a viable long-term allocation strategy,” said Maximilian Radert, Head of Product Development & Research at KINGSTONE Real Estate.

According to findings presented from the KINGSTONE Family Office Real Estate Report 2025, based on interviews with 32 family offices in the DACH region, around 80 percent of real estate investments are made directly rather than through fund structures. Dr. Tim Schomberg, CEO & Co-Founder of KINGSTONE Real Estate, described this as reflecting a broader mindset: “Many family offices see real estate not just as an investment product but as an entrepreneurial stance. Being in control and exerting influence plays a key role.”

Participants confirmed that maintaining direct oversight of assets remains a priority. Direct ownership allows for closer control over management decisions and strategic direction, particularly in domestic markets where investors feel they can leverage local knowledge and networks.

Residential real estate continues to represent the largest allocation within portfolios, with multi-family housing accounting for the biggest share. Office assets remain part of the mix but are subject to more selective screening amid structural shifts in workplace demand. Several speakers indicated that current market conditions are creating opportunities to increase residential exposure over the medium term, particularly where pricing adjustments have improved entry levels.

Real estate’s primary role within portfolios was described as stabilising, with capital preservation and steady performance taking precedence over opportunistic strategies. While selective higher-yield investments are considered, they are typically positioned as complementary rather than core allocations. Operational asset classes such as hotels or care facilities currently play a limited role in the strategies discussed.

Geopolitical tensions and regulatory intervention, particularly in the housing sector, are influencing risk assessments. Investors are factoring in international conflicts, domestic regulation and potential changes in statutory frameworks. However, these considerations have not led to a fundamental shift in strategy. Instead, participants emphasised disciplined underwriting and conservative scenario planning to ensure investments remain viable under varying regulatory conditions.

Long-term structural drivers, including demographic change, decarbonisation requirements and evolving work patterns, were also cited as key elements shaping allocation decisions. These factors are increasingly integrated into acquisition criteria and asset management strategies.

Taxation and structuring considerations remain central to decision-making. Attention was drawn to the expected ruling by Germany’s Federal Constitutional Court on inheritance tax, although no legislative change is anticipated before 2027 at the earliest. The current valuation environment, however, is seen as offering strategic flexibility for asset transfers and structuring, particularly in the real estate segment.

In terms of performance expectations, most family offices are targeting annual returns in the range of four to six percent. Safety-focused investors prioritise capital preservation, while others pursue higher returns through more growth-oriented positioning. As Schomberg noted, “Either approach is legitimate as long as it is consistently implemented.”

Looking ahead, most family offices plan a measured increase in their real estate exposure over the next year. Direct acquisitions remain in focus, with investors seeking to capitalise on the current phase of the market cycle through selective, carefully structured transactions, particularly in Germany.

Two-speed office market in Slovakia sharpens focus on asset quality and obsolescence risk in 2026

Slovakia’s office sector is entering a more clearly divided phase, with modern prime buildings continuing to capture the strongest tenant interest while older properties face a more demanding leasing environment. As the market moves through 2026, the performance gap between top-tier and secondary offices is becoming a central theme for landlords and investors.

Recent market data from Bratislava shows that occupier activity remains heavily focused on newer, high-quality buildings. Companies are showing a clear preference for offices that offer strong technical standards, efficient layouts and credible environmental credentials. This concentration of demand has reinforced the position of prime schemes, particularly in the capital’s core business locations.

At the same time, the flow of new space remains relatively limited. Development activity is subdued compared with earlier cycles, and the pipeline of upcoming completions is modest. Many of the prime projects currently under construction have already secured a substantial share of their future tenants. The constrained availability of new, top-quality space is supporting rental levels at the upper end of the market. Prime headline rents in Bratislava reached around €21 per sq m per month by late 2025 and are expected to edge higher during 2026 if supply remains tight.

Conditions are more challenging for older office buildings. Secondary assets, especially those with weaker technical performance or higher operating costs, are experiencing longer leasing periods and a greater need to offer incentives to attract occupiers. While well-maintained mid-tier buildings can still compete in certain locations, ageing stock without meaningful upgrades is gradually losing ground as tenants become more selective.

Environmental performance is increasingly reinforcing this divide. A significant portion of Bratislava’s office inventory now carries green certification, and occupiers are placing greater emphasis on energy efficiency and workplace quality when evaluating space. Buildings that do not meet these expectations risk seeing their competitive position weaken unless owners invest in modernisation.

The Slovak office market is no longer moving uniformly across all asset types. Liquidity and tenant demand are increasingly concentrated in modern, well-located properties, while older buildings face rising pressure to reposition. For investors, this means underwriting assumptions must pay closer attention to capital expenditure requirements and potential leasing risk in secondary stock.

With prime rents holding firm and the development pipeline relatively thin, tenants have fewer reasons to relocate unless a clear improvement in quality is available. This dynamic continues to favour the best-performing buildings and raises the competitive bar for the rest of the market.

Looking ahead, obsolescence risk is set to become a more prominent strategic issue for owners of ageing offices in Slovakia. Refurbishment programmes, energy upgrades and amenity improvements are likely to move higher on landlord agendas, and in some cases broader repurposing strategies may come into focus. In 2026, success in the Slovak office market will depend less on overall market momentum and more on the individual quality and future readiness of each asset.

Source: CIJ.World Research & Analysis Team

DIW Economic Barometer Rises Above Neutral Level in February

The economic barometer of the German Institute for Economic Research (DIW Berlin) increased to 101.6 points in February, marking a rise of nearly seven points compared with January. The reading moves above the neutral 100-point threshold for the first time in almost three years, signalling a return to average growth conditions in the German economy.

“The signs that Germany will find its way out of economic stagnation this year are becoming stronger,” said Geraldine Dany-Knedlik, Head of Economic Forecasting at DIW. “In particular, fiscal policy measures are increasingly having an effect and should support overall demand in the remainder of the year.”

Sentiment among businesses and households has improved in recent weeks, although uncertainty continues to weigh on the recovery outlook. DIW noted that it remains unclear how quickly allocated public funds will translate into tangible investments and added value. Potential delays in planning, approval and implementation could weaken short-term economic effects. External risks also persist, including ongoing trade policy uncertainty linked to US tariff developments, which continue to affect Germany’s export-oriented industries.

Industrial indicators show early signs of stabilisation. Order intake has increased recently, while the business climate improved in February according to ifo surveys. The Purchasing Managers’ Index (PMI) for German manufacturing rose above the 50-point expansion threshold for the first time in nearly four years. However, production growth remains subdued, reflecting weak global demand and ongoing structural adjustments in sectors such as automotive and chemicals.

“There are signs of a recovery in industry, but the development remains fragile for the time being,” said DIW economic expert Laura Pagenhardt. “While we are seeing initial signs of recovery, the ongoing uncertainty surrounding domestic and international economic conditions is likely to continue to dampen private investment in particular.”

The services sector has also shown improvement. Business expectations have strengthened, according to ifo data, and the services PMI continued to rise in February. DIW links this trend partly to a modest improvement in consumer confidence, suggesting a gradual return in household spending. A stabilising labour market is also contributing to the more positive outlook.

“The long-awaited upswing should now slowly become a reality,” said economic expert Guido Baldi. “For sustained long-term growth, it is now crucial that the German government’s substantial financial resources stimulate concrete investments and that economic policy reform efforts progress rapidly.”

Retail assets outside Bucharest led Romanian investment market in 2025

Retail properties located outside Bucharest accounted for the largest share of Romania’s commercial real estate investment volume in 2025, representing nearly 40% of total transactions, according to the Romania Marketbeat Investment H2 2025 report. Office buildings in Bucharest ranked second, with a 30% share.

Among the retail assets transacted during the year were Focsani Mall and Shopping City Suceava, alongside a portfolio of seven retail parks totaling approximately 32,000 sqm of gross leasable area in Slobozia, Focsani, Ramnicu Sarat, Targu Secuiesc, Sebes, Fagaras and Gheorgheni. Other completed deals included Winmarkt Cluj-Napoca and Tulcea, La Cocoș Ploiești, Module Shopping Center Târgoviște and Joy Retail Park Calafat. The combined value of retail transactions reached around €200 million.

The UK-based group M Core was the most active buyer during the year, expanding its footprint in Romania and becoming the country’s fourth-largest retail property owner.

In the office sector, all recorded transactions took place in Bucharest. Ten office buildings changed ownership, totaling nearly 70,000 sqm, with a combined value of approximately €155 million. Notable deals included Equilibrium I and Ethos House in the Floreasca-Barbu Văcărescu area, as well as Victoria Center in the CBD.

Although occupier demand for industrial and logistics space reached record levels in 2025, the segment was less visible on the investment side. Transaction volumes in this sector declined from nearly €300 million in 2024 to about €45 million in 2025, contributing to the overall market slowdown.

Total commercial real estate investment volume in Romania reached approximately €514 million in 2025, representing a 31% year-on-year decrease and the second-lowest annual result since 2013. The absence of large-ticket transactions was a key factor, with the biggest deals closing in the €50-60 million range.

Among the largest transactions were the strip mall portfolio sold by MAS RE and Prime Kapital, the Equilibrium I office building sold by Skanska, the IRIDE office platform in Pipera, Focsani Mall and Shopping City Suceava.

Cushman & Wakefield Echinox advised on three of the five largest transactions of the year and provided consultancy on 10 deals totaling €190 million. The portfolio included shopping centres, a hotel in Mamaia, office buildings, a logistics park near Bucharest and high-street retail units.

Cristi Moga, Head of Capital Markets at Cushman & Wakefield Echinox, said: “2025 was a year marked by a high activity levels and interest across all property sectors despite the lower transaction volume compared with previous years and to other markets in the region. 2026 has started on an optimistic note, with investors already allocating around €100 million to office buildings in Bucharest and Cluj-Napoca. The macroeconomic environment stabilization, along with improving occupancy rates, infrastructure development and better financing conditions are creating the premises for a growth year, with higher volumes across all segments.”

Across Central and Eastern Europe, investment volumes in income-generating real estate assets reached nearly €11.8 billion in 2025, an increase of 33% compared to 2024. Poland and the Czech Republic accounted for almost 75% of the regional total, while Romania contributed 4.4%, ranking fifth among the seven analysed markets.

Prime yields remained broadly stable throughout 2025. The only notable movement was a 25-basis-point compression for high-street retail assets on Calea Victoriei, where yields reached 7.00%. Prime yields for office buildings and shopping centres were estimated at 7.25%, while industrial assets stood at 7.50%.

Photo: Cristi Moga, Head of Capital Markets at Cushman & Wakefield Echinox

Family offices maintain strong focus on residential and direct real estate investments

Family offices continue to allocate a significant share of capital to real estate, with a clear preference for direct investments and residential assets, according to a recent KINGSTONE Real Estate webinar focused on family office strategies in the current market environment.

More than half of family office wealth remains invested in property, and around 80% of these holdings are structured as direct investments rather than via funds. The findings are based on the KINGSTONE Family Office Real Estate Report 2025, which surveyed 32 family offices across the DACH region.

Participants in the discussion noted that many family offices view real estate ownership as part of an entrepreneurial investment approach, favouring direct control over assets and asset management. This preference continues to shape allocation strategies despite geopolitical uncertainty and regulatory pressures.

Residential assets lead allocations

Residential property remains the dominant segment. Multi-family housing accounts for the largest share of allocations at 37.5%, followed by office assets at 25%. While offices continue to be assessed selectively, residential assets are gaining further attention, supported by perceived entry opportunities in the current market cycle.

Investors generally position real estate as a stabilising component within broader portfolios, prioritising capital preservation and steady performance. Opportunistic strategies are used selectively rather than as a primary focus. Operational real estate sectors such as hotels and care facilities currently play a limited role in most family office strategies discussed.

Risk awareness shaping decisions

Family offices are increasingly factoring geopolitical developments and regulatory risks into their investment frameworks, particularly in relation to the housing market. However, these considerations have not triggered a fundamental shift in allocation strategy.

Structural trends—including demographic change, decarbonisation requirements and evolving workplace models, are also influencing long-term investment planning.

Tax and structuring remain key considerations

The discussion highlighted the importance of fiscal planning. Market participants are monitoring the expected inheritance tax ruling by Germany’s Federal Constitutional Court, although legal changes are not anticipated before 2027. In the meantime, advisors see continued opportunities for asset structuring and transfers within real estate portfolios.

Moderate expansion expected

Return expectations among family offices typically fall in the 4-6% range, depending on risk appetite. Most investors indicated plans to moderately increase their real estate exposure over the next 12 months, with Germany remaining a primary target market. Demand for direct investments is reported to be particularly strong as investors seek selective acquisitions in the current phase of the cycle.

« Previous 1 … 76 77 78 79 80 … 495 Next »

Latest news

All posts by fletcher@cijeurope.com.