House price rises continue to accelerate in Slovak Republic

Lalaine C. Delmendo | November 10, 2020

House prices in Slovakia continue to rise strongly, amidst strong demand buoyed by low interest rates. The nationwide average residential property price rose by 8.6% to €1,671 (US$1,878) per square metre (sq. m.) during the year to Q1 2020, following y-o-y rises of 6.3% in Q4 2019, 9.7% in Q3, 6.4% in Q2 and 7.6% in Q1, according to the National Bank of Slovakia (NBS). When adjusted for inflation, property prices rose by 5.7%.

Slovakia house prices

During the latest quarter, property prices increased 4.6% (3.4% in real terms).

Slovakia’s house prices are now almost 8% above their Q2 2008 peak. But when adjusted for inflation, prices are still 11% below their pre-crisis levels.

In Bratislava region, which has the country’s most expensive housing, residential property prices rose by 8.7% y-o-y to €2,231 (US$2,508) per sq. m. in Q1 2020, after rising by 5.6% a year earlier.

All other regions also saw robust house price increases during the year to Q1 2020.

  • Zilina experienced the biggest rise of about 16.5% y-o-y to €1,254 (US$1,410) per sq. m. but still a slowdown from the previous year’s 21.9% growth.
  • In Trencin, house prices climbed 14.5% y-o-y to €1,025 (US$1,152) per sq. m., following a 19.5% increase in Q1 2019.
  • In Banska Bystrica, house prices increased 14.1% y-o-y to €923 (US$1,038) per sq. m. in Q1 2020, almost three times the growth in the previous year.
  • In Presov, house prices rose by 6.3% y-o-y to €1,050 (US$1,180) per sq. m., a sharp slowdown from the 19% growth seen in Q1 2019.
  • In Kosice, house prices rose by 5.5% y-o-y to €1,092 (US$ 1,227) per sq. m., in contrast to a 3.5% decline in Q1 2019.
  • In Trnava, house prices rose by 5.3% y-o-y to €1,183 (US$1,330) per sq. m., a slowdown from a rise of 12.4% a year earlier.
  • In Nitra, house prices rose by a modest 1.9% y-o-y to €900 (US$1,012) per sq. m., a sharp slowdown from a 27.8% growth in a year earlier

The previous housing boom in Slovakia lasted from 2006 to Q2 2008. The surge stopped in late 2008, and in following years prices either fell or only increased a little. House price growth started to strengthen again in 2016 and have been rising strongly since.


Year Nominal Inflation-adjusted
2009 -12.31 -12.70
2010 -2.31 -3.37
2011 -2.45 -6.66
2012 0.57 -2.81
2013 -2.25 -2,75
2014 0.66 0.70
2015 2.21 2.71
2016 6.48 6.59
2017 4.81 2.93
2018 7.67 5.36
2019 6.32 3.34
Sources: National Bank of Slovakia, Global Property Guide

Slovakia’s housing market is expected to slow in the short-term due to the economic fallout from the coronavirus pandemic, but is expectedto bounce back quickly starting the end of 2020, as property demand, both from local and from foreign investors, remains fundamentally strong.

The economy grew by 2.3% in 2019 from a year earlier, following annual expansions of 4% in 2018, 3% in 2017, 2.1% in 2016 and 4.8% in 2015. The Slovakian economy will contract by around 6.7% this year but is expected to recover quickly in 2021 with 6.6% growth, according to the European Commission.

There are no legal restrictions on foreigners buying buildings in Slovakia.


  House price boom (Q1 2005-Q4 2008) Global financial crisis, eurozone debt crisis (Q1 2009-Q4 2015) Economic growth (2016-19) Q1 2020 (y-o-y change) Euro/sq. m. (Q1 2019)
SLOVAKIA 78.19 -12.81 27.76 8.58 1,671
Bratislava 70.69 -6.13 24.24 8.67 2,231
Trnava 65.23 -15.83 36.53 5.25 1,183
Nitra 111.08 -29.40 65.29 1.93 900
Trencin 177.00 -22.13 55.26 14.53 1,025
Zilina 122.97 -17.13 55.20 16.54 1,254
Banska Bystrica 124.67 -14.06 14.15 14.09 923
Kosice 118.11 -3.44 11.65 5.51 1,092
Presov 77.76 -22.15 44.28 6.28 1,050
Sources: National Bank of Slovakia, Global Property Guide

Apartment prices are surging

Apartments registered the biggest house price gains nationally, rising by 9.7% y-o-y in Q1 2020 to an average price of €2,006 (US$2,255) per sq. m, according to the NBS.

Slovakia average residential property price
  • 1-room: prices rose by 8.9% to €2,266 (US$ 2,547) per sq. m during the year to Q1 2020
  • 2-room: prices rose by 9.5% to €2,108 (US$2,370) per sq. m during the year to Q1 2020
  • 3-room: prices soared 11.9% to €1,901 (US$2,137) per sq. m over the same period
  • 4-room: prices increased 6.9% y-o-y to €1,860 (US$2,091) per sq. m in Q1 2020
  • 5+-room: prices surged by 11.8% y-o-y to €2,121 (US$2,384) per sq. m in Q1 2020

Houses increased in value by 6.4% to €1,264 (US$1,421) per sq. m. during the year to Q1 2020.

Residential construction remains strong

In 2019, the number of housing starts stood at 21,516 units, down by 2.4% from a year earlier but still the second highest level since 2008, according to the Statistical Office of the Slovak Republic. Likewise, completions are now back at pre-crisis levels, and have risen by 5.8% y-o-y to 20,171 units last year – much higher than the average yearly completions of 15,500 units from 2003 to 2009.

The strength of the market continued in early-2020, before the coronavirus outbreak got worse. In Q1 2020:

  • Dwelling permits soared by 32.7% y-o-y to 5,122 units
  • Dwelling starts rose strongly by 26.3% y-o-y to 5,216 units
  • Completions rose by 5.3% y-o-y to 4,587 units
  • Dwellings under construction increased slightly by 0.6% y-o-y to 78,085 units
Slovakia residential construction

Low interest rates are boosting property demand

The average interest rate on both new and outstanding housing loans continue to fall in May 2020.

Slovakia interest rates

For new business:

  • Average floating rate loan interest rate (or loans with interest rate fixation (IRF) of up to 1 year): 1.52% in May 2020, down from 1.72% a year ago, according to the NBS.
  • IRF over 1 to 5 years: 1.16%, down from 1.49% a year ago
  • IRF over 5 to 10 years: 1.25%, down from 1.41% in the previous year
  • IRF of over 10 years: 1.11%, down from 1.48% a year earlier

For outstanding loans:

  • Maturity of up to 1 year: 4.29%, down from 4.46% a year ago
  • Maturity of 1-5 years: 2.85%, down from 2.99% a year ago
  • Maturity of over 5 years: 1.61%, down from 1.85% a year earlier

The low interest rate environment is due to the European Central Bank cutting its key rate to a historic low of 0.00% in March 2016, where it has remained since. In May 2020, the total outstanding amount of housing loans to households rose by about 9.5% to €32.06 billion (US$36.04 billion) from the same period last year, according to the NBS.

Slovakia housing loans

The size of the mortgage market grew rapidly to about 32.7% of GDP in 2019, from 31.3% of GDP in 2018, 16.1% of GDP in 2010, and just 6.3% of GDP in 20o4.

Rental market is very limited

Bratislava appears to be an attractive location to own properties but anecdotally, properties can be quite hard to let. Bratislava is a small place, and few people absolutely need to live in the centre of town unlike the larger capitals of other countries where commuting times can be inconveniently high. Because Slovakia itself is small, the number of expatriates, embassies, and international companies in Bratislava is small, which again restricts the supply of tenants.

Owner-occupancy in Slovakia has risen sharply from about 50% during the 1980s to currently above 90%, making Slovakia the country with the third highest homeownership rate in the EU, way past the EU average of around 70% last year, based on figures from the Eurostat. Tenants were only around 9.7% of Slovakia’s population.

But only 0.1% of Slovakia’s housing stock is let out by private landlords, mainly in Bratislava.

Slovakia owner occupancy rate

The growth of owner-occupation is partly due to contractual savings system (Bauspar) that makes it easy for Slovaks to obtain housing loans. This Bauspar system allows borrowers to take loans at lower interest rates, with the government paying an interest premium on the amount saved.

In 2005, the government decreed the abolition of rent control, effective July 1, 2007. However, the decree was never implemented. Rent deregulation has been postponed repeatedly, as Parliament refuses to deal with this highly sensitive issue.

Yields are moderately good; rents are still low

According to a research conducted by Global Property Guide research, in Stare Mesto, Bratislava’s city centre:

  • Gross rental yields on 40 sq. m. apartments were around 5.01%.
  • Larger units of around 120 sq. m. had slightly lower yields of 4.53%.
  • The average yield in Stare Mesto fell slightly to around 4.5%, from 5.5% four years ago.

In the Bratislava’s less upscale districts of Ruzinov and Nove Mesto (Bratislava II and III), gross rental yields were not much different, between 4.6% to 5.7%. The Airbnb market is thriving, but expect damage to your property.

Rents range from around €11 (US$12.4) to €14 (US$15.7) per sq. m. per month in the Old Town of Bratislava, whereas in the nearby areas of Ruzinov and in the New Town, rents range from €9 (US$10.1) to €12.5 (US$14.1) per sq. m. per month.

Round trip transaction costs are very low on residential property in Slovakia.

Economy to bounce back quickly in 2020

Slovakia is one of Eastern Europe’s most successful transition countries. Born in 1993 after seceding amicably from the Czech Republic (the two countries were formerly known as Czechoslovakia), it has a stable polity and liberal market economy. Slovakia benefited from eight years’ reform under the centre-right coalition led by Mikulas Dzurinda (1998-2004) whose reforms won praise from international organizations, and who oversaw EU and Nato entry.

The economy’s rapid growth facilitated the country’s membership of the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) in 2004. In December 2007 Slovakia became a full member of the Schengen Zone, allowing passport-free travel in the 24-member European nations.

Real GDP growth reached an impressive 10.8% in 2007, following 8.5% growth in 2006. Kia, Volkswagen, and Peugeot Citroen all have built large car plants in Slovakia. In 2008 there was 5.6% growth.

With the crisis there was a 5.4% GDP contraction in 2009. Slovakia’s economy recovered quickly with GDP growth of 5% in 2010, but this was followed by 4 weak years, with 2.8% GDP growth in 2011, 1.7% in 2012, 1.5% in 2013 and 2.8% in 2014.

Slovakia gdp inflation
In the past five years, the economy bounced back, recording a 4.8% expansion in 2015, 2.1% in 2016, 3% in 2017, 4% in 2018 and 2.3% in 2019. The Slovakian economy will contract by around 6.7% this year due to the COVID-19 pandemic but is expected to recover quickly in 2021 with a 6.6% growth, according to the European Commission.

In early-June 2020, the government lifted most of its anti-coronavirus restrictions and reopened its borders for 16 countries, including Liechtenstein, Germany, Switzerland, Croatia, Slovenia, Bulgaria, Cyprus, Greece, Malta, Estonia, Lithuania, Finland, Latvia, Denmark, Norway and Iceland. Slovakia has one of the world’s lowest death rates from the pandemic.

Slovakia unemplyment

Slovakia’s budget deficit was equivalent to 1.3% of GDP in 2019, slightly up from 1% of GDP in the prior year. However, the shortfall is expected to rise sharply this year to around 8.5% of GDP, based on projections by the European Commission.

Slovakia’s gross public debt has fallen to 48% of GDP in 2019, down from 49.4% in 2018, 51.3% in 2017 and 54.7% in 2013, but is projected to rise to a record of around 60% of GDP this year, as the coronavirus outbreak forces a surge state spending to surge to help workers and companies.

In May 2020, nationwide inflation stood at 2%, down from 2.7% a year earlier and the lowest level since December 2018, as fuel prices and transport costs continue to plunge, based on figures from the Statistical Office of the Slovak Republic. Inflation is expected to slow to 1.1% this year, from 2.8% in 2019, and 2.5% in 2017, according to the IMF.

Unemployment fell to a record low of 5.8% in 2019, from 6.6% in 2018, 8.1% in 2017, 9.7% in 2016 and from an annual average of 13.3% from 2009 to 2015, according to the IMF. However in 2020, the jobless rate is expected to rise to 8%, before falling slightly to 7.4% in 2021, mainly due to the impact of the COVID-19 pandemic.

The fall of Fico’s Smer-SD party

In 2006 Roberto Fico became Prime Minister (prime minister 2006-2010, and 2012 to March 2018), swept in on a victory for the populist Smer-SD party after loudly criticizing the previous right-wing government’s economic, tax, social, pension and legislative reforms. These had been seen as very positive and successful by such international bodies as the IMF, the World Bank and OECD. However they negatively affected large segments of the population, particularly low wage earners, the unemployed, and welfare and other social assistance recipients.

While in opposition and during the election campaign, Fico vowed to reverse the majority of these reforms, but on taking office he adopted a more cautious approach, and Slovakia successfully fulfilled the Maastricht criteria required for Euro currency adoption on 1 January 2009.

Fico’spopulism found expression in virulent campaigns insulting opponents and press critics, denouncing them as anti-Slovaks. They in turn produced many revelations of his corruption, including the unexplained wealth of an apparent mistress, his now-secretary Halászová. Fico’s stewardship was marked by tension with Hungary, and by populist aggression towards Slovakia’s Roman population and Muslim refugees.

Following the murder of investigative journalist Ján Kuciak, who wrote stories about tax frauds and the connections of the Italian mafia ´Ndrangheta to Fico’s assistant Mária Trošková, Fico resigned the premiership in March 2018. But though Smer-SD replaced Fico as PM with former Deputy Prime Minister Peter Pellegrini, Fico remained the power behind the throne.

During the March 2019 presidential election, socially-liberal and pro-EU opposition candidate Zuzana Caputova beat the government’s Maros Sevcovic, with 58% of the vote. Caputova officially assumed office in June 2019.

Then during the February 2020 parliamentary elections, Smer-SD’s Peter Pellegrini lost to the anti-corruption Ordinary People (OLaNO) party led by Igor Matovic, who formed a centre-right coalition the following month.

It was the first time Smer-SD had not finished as the largest party since the 2006 elections, mainly due to the continuing public anger over the killing of Kuciak.


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