House prices continue to rise in Slovak Republic

Lalaine C. Delmendo | October 13, 2018


Slovakia house pricesHouse prices in Slovakia continue to rise strongly, with demand buoyed by low interest rates and robust economic growth.

The average residential property price rose by 4.8% to €1,396 (US$1,621) per square metre (sq. m.) during the year to Q1 2018, down from a y-o-y rise of  7.59% in Q1 last year, according to the National Bank of Slovakia (NBS). When adjusted for inflation, property prices rose by 2.41%. During the latest quarter, property prices rose by 2.65% (1.5% in real terms).

Despite this, Slovakia’s house prices are still 9.9% below their Q2 2008 peak (-21.6% in real terms).

In Bratislava region, which has the country’s most expensive housing, residential property prices rose by 3.84% y-o-y to €1,945 (US$2,259) per sq. m. during the year to Q1 2018, after rising 8.58% a year earlier.

All other regions also saw robust house price increases.

  • Kosice experienced the biggest rise of about 12.6% y-o-y to €1,073 (US$1,246) per sq. m.
  • In Trnava, house prices surged 9.7% y-o-y to €1,000 (US$ 1,161) per sq. m.
  • In Banska Bystrica, house prices increased 8.5% y-o-y to €769 (US$893) per sq. m.
  • In Nitra, house prices rose by 7.3% y-o-y to €691 (US$802) per sq. m.
  • In Trencin, house prices rose by 6.4% y-o-y to €749 (US$870) per sq. m.
  • In Zilina, house prices increased 5.2% to €883 (US$1,025) per sq. m. over the same period
  • In Presov, house prices rose by 3% y-o-y to €830 (US$964) per sq. m.

The 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.


Year Nominal Inflation-adjusted
2009 -12.31 -12.66
2010 -2.08 -3.16
2011 -2.68 -6.86
2012 0.89 -2.55
2013 -2.57 -3.01
2014 0.25 0.25
2015 1.15 1.62
2016 5.84 6.00
2017 4.29 2.43
Source: National Bank of Slovakia

House prices in Slovakia are expected to continue rising this year.  Property demand, both from local and from foreign investors, is surging, according to local property experts.

That´s largely because Slovakia´s economy is projected to expand by 4% this year and by another 4.3% in 2019, according to the IMF.  Slovakia registered economic growth of 3.4% in 2017, after GDP growth of 3.3% in 2016, 3.9% in 2015, 2.8% in 2014, 1.5% in 2013, 1.7% in 2012, and 2.8% in 2011. This stronger economic growth is likely to continue boosting house prices. 

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 (2016-17) Q1 2018 (y-o-y change) Euro/sq. m. (Q1 2018)
SLOVAKIA 78.19 -12.81 10.39 4.80 1,396
Bratislava 70.69 -6.13 11.01 3.84 1,945
Trnava 65.23 -15.83 13.77 9.65 1,000
Nitra 111.08 -29.40 23.45 7.30 691
Trencin 177.00 -22.13 16.17 6.24 749
Zilina 122.97 -17.13 15.73 5.24 883
Banska Bystrica 124.67 -14.06 1.39 8.46 769
Kosice 118.11 -3.44 13.27 12.59 1,073
Presov 77.76 -22.15 7.18 2.98 830
Source: National Bank of Slovakia 

Apartment prices are surging

Slovakia average residential property price

Apartments registered the biggest house price gains nationally, surging by 6.9% y-o-y in Q1 2018 to an average price of €1,681 (US$1,952) per sq. m, according to the NBS.

  • 1-room: prices soared 6.1% to €1,875 (US$2,177) per sq. m during the year to Q1 2018
  • 2-room: prices rose by 5.9% to €1,772 (US$2,058) per sq. m during the year to Q1 2018
  • 3-room: prices rose by 7.1% to €1,582 (US$1,837) per sq. m over the same period
  • 4-room: prices surged 10.6% y-o-y to €1,622 (US$1,884) per sq. m in Q1 2018
  • 5+-room: prices fell by 3.7% y-o-y to €1,601 (US$1,859) per sq. m in Q1 2018

Houses increased in value by just 3.2% to €1,137 (US$1,320) per sq. m. during the year to Q1 2018.

Residential construction activity mixed

Slovakia residential construction

In 2017, the number of housing starts stood at 19,930 units, down by 7% from a year earlier, according to the Statistical Office of the Slovak Republic. However starts are now back at pre-crisis levels, and completions rose by 8.1% to 16,946 units in 2017 – higher than the average yearly completions of 15,500 units from 2003 to 2009.

In Q1 2018:

  • Dwelling permits dropped 12.2% y-o-y to 3,583 units
  • Dwelling starts dropped 8.8% y-o-y to 3,817 units
  • Completions rose by 10.2% y-o-y to 4,348 units
  • Dwellings under construction increased 2.8% y-o-y to 74,258 units

Low interest rates are boosting property demand

Slovakia interest rates

The average interest rate on housing loans stood at 1.65% in March 2018, having fallen continuously from 1.88% in March 2017, 2.11% in March 2016, and 2.87% in March 2015, according to the NBS.

In March 2018:

  • Average floating rate loan interest rate (or loans with interest rate fixation (IRF) of up to 1 year): 1.76%
  • IRF over 1 to 5 years: 1.65%
  • IRF over 5 to 10 years: 1.63%
  • IRF of over 10 years: 1.69%

Slovakia housing loans

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.  Unsurprisingly in Q1 2018, the total outstanding amount of housing loans to households rose by more than 11% to almost €26 billion (US$30.2 billion) from the same period last year, according to the NBS.

Rental market is very limited

Slovakia owner occupancy rate

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 less than 70%. Tenants were only around 9.7% of Slovakia’s population, according to Eurostat.

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

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 the Global Property Guide research conducted in July 2017, in Stare Mesto, Bratislava’s city centre:

  • Gross rental yields on 50 sq. m. apartments were around 5.25%.
  • Larger units of around 120 sq. m. had slightly lower yields of 4.47%.
  • The average yield in Stare Mesto fell slightly to around 4.5% this year, from 5% in 2016 and 5.53% three 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 5.35%. The Airbnb market is thriving, but expect damage to your property. 

Rents range from around €11.5 (US$13.4) to €12.5 (US$14.5) 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 €8.8 (US$10.2) to €10.6 (US$12.3) per sq. m. per month.

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

Healthy economic growth; falling unemployment

Slovakia gdp inflation

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.

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 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 primarily 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 conducted virulent campaigns insulting press critics as anti-Slovaks, who 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 populism towards Slovakia’s Roma population and Muslim refugees.

Real GDP growth reached an impressive 10.8% in 2007, following 8.5% for 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.

In the past three years, the economy bounced back, recording a 3.9% expansion in 2015, 3.3% in 2016 and another 3.4% in 2017. The Slovakian economy is projected to expand by 4% this year and by another 4.2% in 2019, according to the IMF.

Slovakia unemplyment

Slovakia´s budget deficit fell to below 1% of GDP in 2017, down from 2.2% in 2016, and 2.7% from 2013 to 2o15, and the country is expected to record its first budget surplus of 0.16% of GDP in 2019. 

Slovakia’s gross public debt has fallen to 50.9% of GDP in 2017, down from 54.7% in 2013, according to the Statistical Office of the Slovak Republic, and is projected to fall to 46.6% of GDP next year, according to the International Monetary Fund (IMF).

The country had an annual inflation rate of 2.8% in June 2018, up from from -0.8% two year ago, according to the Statistical Office of the Slovak Republic.

Unemployment fell to a record low of 7.1% in Q1 2018, from an annual average of 13.3% from 2009 to 2015, according to the country’s statistics agency.

Fico resigned the premiership in March 2018, following the murder of investigative journalist Ján Kuciak, who was writing stories on tax frauds and the connections of the Italian mafia ´Ndrangheta to Mária Trošková, an assistant to Fico.  However the current ruling government coalition continues, Smer having named as prime minister former Deputy Prime Minister Peter Pellegrini. Fico remains the power behind the throne.


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