The net wealth of Slovak households has grown by almost 40 percent in three years to stand at €70,000, according to the latest survey on the financial situation and consumption of households, carried out by Slovakia's central bank (NBS) and published by VUB bank in its latest monthly bulletin. Almost the entire growth in wealth can be ascribed to increases in the price of real estate, which makes up over 80 percent of overall household assets. For example the average housing price increased by 3 percent between July and September this year , as compared to the previous quarter, to €1,603 per square meter on average, according to the Central Bank's data. In a year-on-year comparison the growth reached 9.7 percent. "We are talking about houses and flats in which their owners live, with Slovak families unable to monetise these assets so as to make use of the money in a difficult situation, as they need somewhere to live," according to VUB bank's analysts.
In the monitored period as many as 89 percent of households lived in their own apartments or houses, which is among the highest proportions in Europe. Meanwhile, the proportion of households owning two or more pieces of real estate grew from 19 percent to 28 percent. "The rest of the new net wealth is in the form of other real assets, such as cars, business-related property, valuables and financial assets," stated the VUB analysts.
Meanwhile, the Central Bank's survey has shown that the average level of debt among Slovak households has grown along with their net wealth. The average household debt as much as doubled in three years, chiefly due to housing loans. However, the proportion of households in debt didn't increase over the monitored period, remaining stable at 37 percent. The financial assets of Slovak households continued to be concentrated mainly in bank deposits (70 percent), where they earn nothing. "With a lack of experience among Slovak households with financial assets, the low liquidity of the Slovak stock market and growing real estate prices, big increases in real assets, i.e. the aforementioned real estate, cars, business-related property and valuables, seem to be well-founded," stated the Central Bank's analysts.
