Luxury Homes in Slovakia drop 40% in Price Overnight

A luxury property developer in Bratislava has slashed prices of a luxury housing project by 40%

Artists' rendition of River Park, Slovakia

Much to the ire of other local luxury property developers, J&T real estate have reduced the prices of luxury apartments in their “River Park,” complex in Bratislava by 40 percent. Overnight on November 11th.  River Park is a luxury complex on the banks of the river Danube, close to Bratislava Castle.

J&T spokesman Maroš Sýkora made no bones about the reasons behind the drastic reductions,

The main reason for cutting prices is the financial crisis. The approach of the banks towards projects has changed. This of course means that the real estate market, and along with it the luxury segment, are quite affected. People are now more careful when purchasing and market prices are therefore less stable; under the influence of all these factors, developers of course have problems launching new projects as well additional phases of existing projects.

J&T have come in for some considerable criticism from other local developers, who are refusing to drop prices by more than 10% and are still confident that the financial crisis is not affecting them, despite the fact that sales of luxury aprtments in Bratislava have all but dried up, and the banks are making it clear that there is no money available for large loans on these properties.

River Park November

The River Park complex is still under construction, and 140 of the 202 units have been released for sale. J&T remain confident also that prices will return to their former glory, although it is rather hard to justify a 40% price cut and still be claiming this, so one has to assume that this “limited time offer,” is a cash flow solution. Realistic pricing is the best way to kick start a slow luxury real estate market, and it remains to be seen whether other developers in Slovakia will follow suit.