Here Comes Booming Bratislava

A hot real estate market in the Slovak capital is pushing its suburbs into Hungary and Austria, and easier cross-border movement is making it possible

By Adam Eaglin

Karin Fassingerova, the affable director of Hotel Rajka, looked toward her town's main road as she sat talking on the outside terrace of the hotel. In the mid-afternoon heat, most of the town's 3,500 residents were either at work in Bratislava or had fled to cooler places indoors, and the quiet neighborhood roads looked deserted.

These days, though, with a new crop of young Slovak professionals snatching up property, Rajka is bustling. It's not rare to hear a young couple gossiping in Slovak over coffee at the village's small café-restaurant, or to see BMWs drive up in front of the many real estate offices crowded around Bem Apo Utca, Rajka's main route to Bratislava.

With all the new energy pouring into this old town, no wonder Slovaks have trouble remembering that Rajka is actually in Hungary, not Slovakia. Fassingerova, herself a Slovak who lives in Bratislava, smiled when discussing the frequent confusion.

"Many people, when I communicate with my suppliers, say ‘Oh, Rajka? It's in Slovakia?' and I have to explain to them that it's not," she said with a laugh.

This mistake is all the more surprising, she added, because Slovaks only started moving to the village in recent years. "Two years ago this massive influx began."

Seven months ago, such cross-border movement became much easier when both Hungary and Slovakia entered the Schengen passport-free zone. It is a scene not uncommon across Central and Eastern Europe since the expansion of the 24-nation Schengen zone at the end of 2007, when old border stops disappeared. But the change has had a particularly noticeable impact on Bratislava.

With a booming economy, suburb-like proximity to Vienna, and a boxed-in location along the frontiers of two countries, Bratislava has begun to demonstrate how quickly a new Europe can evolve across borders through property investment and shifting living patterns.

"In the near future, we will see completely new suburbs of Bratislava rising on Austrian territory," said Otilia Simkova, head of Slovakian sales for the Right Move Abroad overseas property agency. "With Schengen in existence, borders between Bratislava and Vienna will virtually disappear."

EUROPEAN TIGER

In June, Global Property Guide, which analyzes worldwide property markets, declared Slovakia to have the hottest housing market in the world, after inflation, with a 29.3 percent year-on-year increase in prices. That rate beats out China, Hong Kong, and Singapore. Property prices throughout the country, and particularly in the capital, have skyrocketed since 2004.

For market analysts with an eye on Slovakia, the rapid development of the last decade has been nothing short of astounding. An economic weakling when it emerged from Czechoslovakia in 1993, Slovakia's small economy has sprinted past much of Central and Eastern Europe to become one of the fastest growing economies in Europe. A slew of major international companies—including automotive manufacturers and high-tech firms—have invested in the country, slowly bringing more purchasing power to its citizens.

In 2000, four years before it joined the EU, Slovakia's yearly GDP growth was almost half the EU average, according to the Slovak Investment and Trade Development Agency (SARIO). But by 2006, GDP growth had quadrupled—far surpassing the EU average—and on 10 July, Slovakia officially became only the second former communist country after Slovenia to be approved for transition to the euro in 2009.

Stop a Slovak pedestrian on the street in Bratislava, and they'll tell you how drastically the face of their city has changed in recent years. Luxury towers, once unheard of, have sprung up throughout the city's more affluent areas. A stroll down the Danube River —which hugs the historic city center—reveals block after block of towering cranes, dusty construction crews, and the frames of multistory buildings blossoming up from concrete foundations.