After the rapid growth of real estate prices between 2013 and 2022, the situation in the Slovenian real estate market has stabilized in the last two years. Prices are still rising, but at a more slow and linear rate. The reason for this is high interest rates and reduced accessibility of loans, which have pushed some buyers out of the market. The highest demand is in desirable locations such as Ljubljana, the coast and tourist centers, where supply lags behind demand.
The rise in prices in the real estate market in Slovenia is the result of several factors. One key factor is the lack of supply. Due to limited construction of new apartments, especially in Ljubljana and other major cities, demand exceeds supply, pushing prices upward. Strict spatial and construction regulations have also contributed to this, limiting the possibilities for urban expansion and increasing construction costs. Many investments are directed towards luxury apartments, further reducing the availability of affordable housing for young people and the middle class.
Another important factor is the low interest rate on mortgage loans. Due to favorable financing conditions and low interest rates, banks have enabled access to cheap capital, which has increased the purchasing power of the population and stimulated greater 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 towards real estate as a safe form of investment.
In addition, it’s necessary to mention the influence of foreign investors, especially from European Union countries, who have recognized Slovenia as an interesting destination for real estate investment due to the stability of the Slovenian market and the proximity to major European cities. Foreigners have thus become an important segment in the market, which has further raised prices, especially in the capital and on the coast.
In the past year, with the declining number of transactions and high prices of real estate and land, it appears that the peak of the real estate cycle has already been reached and we are currently transitioning into a phase of slowdown and cooling at the national level.
When forecasting for the real estate market, in addition to economic conditions, regulatory measures must also be considered, such as the introduction of a real estate tax, restrictions on renting properties to tourists, and construction of housing for vulnerable groups. The introduction of the tax could encourage owners of vacant properties to sell or rent, which would increase supply. Although no major price changes are expected immediately, the market can be affected by inflation, international trends, and political decisions. Moderate price growth is anticipated, although unforeseen circumstances could change the situation.
For more information or a consultation, please contact us; Phone: 00386-40-626-131, E-mail: tajnistvo@bazarealestate.com.
