Slovenia’s house price growth moderating
Slovenia’s house price increases are decelerating, amidst falling property demand and weakening residential construction activity.
During 2023, the nationwide house price index was up by 6.77%, following y-o-y increases of 11.59% in 2022 and 15.77% in 2021, according to figures from the Statistical Office of the Republic of Slovenia. When adjusted for inflation, house prices increased by just 1.4% last year.
On a quarterly basis, nationwide house prices rose by 2.39% in Q4 2023 (2.8% inflation-adjusted).
Slovenia’s house price annual change
During 2023:
- In Ljubljana, Slovenia’s capital, the price index for existing flats rose by 4.77% y-o-y (but fell slightly by 0.5% in real terms). On a quarterly basis, prices were up by 3.77% (4.19% inflation-adjusted) in Q4 2023.
- In Maribor, Slovenia’s second-largest city, existing flats prices increased strongly by 8.38% y-o-y (2.93% inflation-adjusted) last year. Quarter-on-quarter, prices were up 2.92% (3.34% inflation-adjusted).
- In the rest of Slovenia, the prices of existing flats were up by 5.06% (fell by 0.23% when adjusted for inflation) during 2023. On a quarterly basis, the price index rose by a modest 3.1% (3.52% inflation-adjusted) in Q4 2023.
After booming in the early-2000s, Slovenia’s property market weakened in 2008 due to the global economic crisis. The following years were difficult. House prices fell every year till 2014, at least in inflation-adjusted terms.
House prices started to recover in 2015 and have been on a rising trend since then, even during the Covid-19 pandemic in 2020-21. Yet there are signs that housing market growth is slowing due to falling demand.
| ANNUAL HOUSE PRICE CHANGE IN SLOVENIA, 2008-2023 | ||
| Year | Nominal | Inflation-adjusted |
| 2008 | -0.16 | -3.40 |
| 2009 | -8.12 | -9.14 |
| 2010 | -0.15 | -1.80 |
| 2011 | 1.37 | -1.07 |
| 2012 | -8.83 | -11.12 |
| 2013 | -4.38 | -5.42 |
| 2014 | -4.39 | -4.30 |
| 2015 | 0.05 | 0.64 |
| 2016 | 6.89 | 6.27 |
| 2017 | 9.87 | 8.44 |
| 2018 | 8.27 | 6.28 |
| 2019 | 4.83 | 3.23 |
| 2020 | 5.17 | 5.92 |
| 2021 | 15.77 | 11.14 |
| 2022 | 11.59 | 1.40 |
| 2023 | 6.77 | 1.40 |
| Sources: Statistical Office of the Republic of Slovenia, Global Property Guide | ||
Property demand is plummeting. In 2023, the total number of dwelling transactions fell sharply by 24% from a year earlier, to 9,786 units, following an annual decline of 7.6% in 2022 and a growth of 19.9% in 2021, according to the Statistical Office of the Republic of Slovenia. In terms of transaction value, dwelling sales stood at €1.39 billion in 2023, down by 18.9% from a year earlier.
Similar to local demand, foreign demand is also weak despite liberal foreign homeownership rules. Foreigners have been able to buy property since February 2003, on a reciprocal basis. Reciprocity is a principle verified by the Ministry of Justice (MoJ) based on the Law on Reciprocity (Official Gazette No 9/99). Then following accession to the EU in 2004, EU citizens may now buy properties in Slovenia without restrictions.
Due to high-interest rates, the residential mortgage market is also slowing. In February 2024, total lending for house purchases was up by a minuscule 0.9% y-o-y to €8.29 billion, based on figures from the Bank of Slovenia.
Residential construction activity is also weakening. In 2023, dwelling permits issued rose by 6.7% y-o-y to 5,441 units, a slowdown from annual increases of 21.8% in 2022, 14.9% in 2021, and 11.6% in 2020. In the first two months of 2024, the number of dwellings for which permits were issued plunged by 38.9% to just 662 units.
During 2023, Slovenia’s economy grew by a meager 1.3%, a slowdown from annual expansions of 2.5% in 2022 and 8.2% in 2021, as the country feels the brunt of the global economic uncertainty and geopolitical tensions, including the war in Ukraine, aggravated by the adverse impact of the devastating floods in August 2023.
The European Commission expects the Slovenian economy to expand by 1.9% this year, before improving to 2.7% in 2025. The IMF is a bit more optimistic, projecting a real GDP growth rate of 2.2% this year and another 2.6% in the following year.
Stronger price hikes on newly-built properties
Newly-built dwellings are currently rising in value faster than existing dwellings, in annual terms. In 2023, the price index of newly built dwellings rose by 8.36% (2.92% inflation-adjusted) from a year earlier. Quarter-on-quarter, prices were also up by 3.03% (3.45% inflation-adjusted) in Q4 2023.
- The newly-built flats price index rose by 8.03% (2.59% inflation-adjusted) during 2023. The index increased 3.51% (3.93% inflation-adjusted) from the previous quarter.
- The newly-built family houses price index soared by 9.53% y-o-y (4.02% inflation-adjusted) in 2023. On a quarterly basis, the index increased slightly by 1.42% (1.83% inflation-adjusted) in Q4 2023.
The values of existing dwellings are also rising, albeit at a slower pace, increasing by 6.62% y-o-y in 2023 (1.26% inflation-adjusted). On a quarterly basis, newly built dwellings rose by 2.33% (2.74% inflation-adjusted) in Q4 2023.
- The existing flats price index increased by 5.86% y-o-y (0.54% inflation-adjusted) in 2023 and was up by 3.62% (4.04% inflation-adjusted) during the latest quarter.
- The existing family houses price index rose by 7.9% y-o-y (2.48% inflation-adjusted) in 2023 and was barely up by 0.22% (0.63% inflation-adjusted) during the latest quarter.
Demand is falling rapidly
During 2023, the total number of dwelling transactions fell sharply by 24% from a year earlier, to 9,786 units, following an annual decline of 7.6% in 2022 and a growth of 19.9% in 2021, according to the Statistical Office of the Republic of Slovenia.
By property type, in 2023:
- Existing dwelling transactions fell by 24% to 9,461 units in 2023 from a year earlier. Transactions of existing flats, which accounted for more than 56% of total dwelling transactions, were down by 22% in 2023 from the previous year. Likewise, existing family house transactions also dropped by 24.5%.
- Newly-built dwelling transactions, which account for less than 4% of total transactions, fell by a huge 43.1% y-o-y to 325 units in 2023. Transactions of newly built flats and family houses plunged by 37.2% and 64%, respectively, over the same period.
In terms of transaction value, dwelling sales stood at €1.39 billion in 2023, down by 18.9% from a year earlier. Existing dwelling sales, which accounted for 93.5% of the total value of transactions, dropped by 17.6% while newly-built dwellings sales plunged by 33.3%.