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In addition to natural market forces, the COVID pandemic and then the war in Ukraine has started to affect property prices, resulting in high inflation, rising interest rates and a change in consumer behaviour. Although these events affect both markets equally, they have different effects on different segments; their effect is different for office buildings and shopping centres, for example.
The paradox is that more expensive bank financing, combined with inflation, is pushing up targeted real estate yields, which is reflected in a decline in property values. There are also positive effects. For example, the production of products is gradually moving to their countries of origin, so-called “reshoring”, and the trend of consumers not to travel so much for products. This favours the appreciation of local retail and logistics parks in the Czech Republic and Slovakia.
In commercial real estate, the most important difference is the competition in the investment market. While the Czech investment market is made up of dozens of players with a high share of foreign investors, there are only a few in Slovakia. On the other hand, this, together with other factors, correlates with their higher performance.

The residential market is largely influenced by consumer appetite, linked to the mortgage market, which is different in Slovakia and the Czech Republic. Interest rates in the Czech Republic are regulated by the Czech National Bank, whereas in Slovakia it is the European Central Bank. Compared to us, Slovak mortgages are cheaper by around 3 percentage points, which has a dramatic effect on demand in the residential market itself.
The property market is cyclical – periods of growth are followed by periods of ‘sobering up’ in the form of falling property values. The strong growth seen in the second half of the last decade peaked around 2021. Since then, property values have been falling again. This presents an opportunity to invest in real estate that is no longer ‘overpriced’.
From an institutional perspective, new funds will have an advantage, as well as funds able to absorb any further price declines. CB Property Investors, a fund established in 2020, has been created for this period and seeks properties in various stages of construction, where the completion of the construction itself will bring about significant appreciation.