The Geodetic Office GURS has published a report on the Slovenian real estate market in 2022
The Geodetic Office GURS has published the report “The Slovenian Real Estate Market in 2022”.
In 2022, the Slovenian real estate market reached a new record price level for the second year in a row, and the number of completed sales transactions decreased by 5-10 percent, indicating a gradual cooling of the market.
The number of residential real estate transactions decreased by 10% nationwide compared to 2021. The decrease in the number of transactions was noticeable in all major cities, but was especially noticeable in Ljubljana, where a significant decline in apartment sales began at the end of 2021. The number of transactions with land for construction decreased by more than 15%, which can be explained by a decrease in demand due to high land prices and high construction costs, as well as a decrease in the purchasing power of the population. This is a signal of a gradual decline in construction activity in the near future.
In Ljubljana, new residential projects are being built and planned on a large scale, but in other major cities, it may happen that due to the cooling of the market and the high cost of construction, large-scale construction growth stops before it even starts.
Real estate prices continued to rise last year. Compared to 2021, prices for apartments increased by 19%, the cost of land for the construction of residential buildings – by 17%, and houses – by 12%. The price increase in 2022 was mainly affected by the extraordinary price increase in the first half of the year. At the same time, in the second half of the year, price growth slowed down a bit. In the second half of last year, prices for apartments in the largest cities of Slovenia remained virtually unchanged.
Declining number of transactions, record property prices and declining demand for building land show that the top of the cycle has already been reached in the first half of 2022 and the market has entered a slowdown or cooling phase.
High real estate prices and rising interest rates continue to reduce the effective demand of the population, as well as investment demand for residential real estate. It is expected that the cooling of the market will continue in the current year. It’s been expect that the growth in residential real estate prices will stop and be replaced by some decline, especially in the secondary market.
In 2022, compared to 2021, the activity of the residential real estate market decreased significantly, mainly due to a decrease in the number of transactions in the second half of the year. In the first half of the year, the number of apartment sales fell, while house sales remained at the level of last year. According to our estimates, in the last quarter of 2022 alone, compared to the same period in 2021, the number of sales of apartments decreased by about 20%, and houses – by more than 15%.
The Slovenian real estate market in 2022. Sources: https://www.e-prostor.gov.si/fileadmin/Podrocja/Trg_vrednosti_nep/Trg_nepremicnin/Porocila_o_trgu_nepremicnin/2022/Letno_porocilo_za_leto_2022.pdf
