Housing is increasingly unaffordable
Falling real wages and rising mortgage rates are making housing increasingly unaffordable, NBS says. Even the recent drop in property prices has failed to offset this effect. The central bank’s Housing Affordability Index, which takes into account mortgage rates, house prices and wages, has fallen and would require a 17% fall in house prices to return to its long-term average. Housing is least affordable in the Prešov, Košice, and Žilina regions. Bratislava is the best off, thanks to both falling prices and dynamic wage growth. The incipient price correction means that prices have moved from the high risk price bubble zone to the equilibrium zone.