After rapid property price growth between 2013 and 2022, the situation in the Slovenian real estate market has stabilized over the past two years. Prices are still rising, but at a slower and more linear pace. The main reasons for this are high interest rates and the more difficult access to loans, which has pushed some buyers out of the market. The highest demand is in desirable locations such as Ljubljana, the coast, and tourist destinations, where supply lags behind demand.
The rise in property prices in Slovenia is the result of several factors. One key factor is the lack of supply. Due to limited construction of new housing, especially in Ljubljana and other major cities, demand exceeds supply. This is further exacerbated by strict spatial and building regulations, which limit the expansion of cities and increase construction costs. Many investments are directed towards luxury apartments, further reducing the availability of affordable housing.
Another significant factor is the low interest rate on mortgage loans. Favorable financing conditions and low-interest rates provided by banks have enabled access to cheap capital, increasing the purchasing power of the population and driving up demand for real estate. At the same time, due to low returns on other types of investments (such as bank deposits or bonds), many investors have turned to real estate as a safe investment option.
Additionally, it is important to mention the influence of foreign investors, especially from European Union countries, who have recognized Slovenia as an attractive destination for real estate investment due to the stability of its market and proximity to major European cities. Foreigners have become a significant segment of the market, further driving up prices, particularly in the capital and along the coast.
In the past year, with the decline in the number of transactions and high property and land prices, it seems that the peak of the real estate cycle has been reached, and we are now transitioning into a phase of slowdown and cooling across the country.
When forecasting the real estate market, in addition to economic conditions, regulatory measures should also be considered, such as the introduction of a property tax, restrictions on short-term rentals to tourists, and the construction of housing for vulnerable groups. The introduction of the property tax could encourage owners of vacant properties to sell or rent, increasing supply. Although no major price changes are expected in the short term, the market could be influenced by inflation, international trends, and political decisions. In the future, moderate price growth is anticipated, though unforeseen circumstances could alter the situation.
For more information or a consultation, please contact us; Phone: 00386-40-626-131, E-mail: tajnistvo@bazarealestate.com.
