Slovenian Real Estate Market in 2024: Persistent Decline in Transactions and Rising Prices Amid Structural Barriers
Transactions are falling, prices are rising – the paradox continues
For the third consecutive year, the Slovenian real estate market is showing a strange and alarming trend: the number of transactions is decreasing, while prices continue to rise. This is happening despite overall favorable macroeconomic conditions – lower bank interest rates, low unemployment, and stable demand. All of this suggests that the market is overheated and significantly imbalanced.
Triple paradox: high demand, fewer transactions, higher prices
Real estate sales continue to decline. Compared to 2023:
– Apartment transactions fell by 15–20%
– Single-family house transactions dropped by 10–15%
– Building land transactions decreased by 20%
Compared to the market peak in 2021, the decline is even more pronounced: housing transactions are down 35–40%, and land sales have fallen by over 45%. A similar decline – around 15–20% – is observed in the commercial property segment (offices, retail, restaurants).
Market activity is weakening overall: investor interest is fading, and real estate is becoming increasingly unaffordable for average buyers.
Yet, despite the slowdown in activity, prices are not dropping. On the contrary, they continue to rise:
– Apartment prices increased by 10%
– House prices by 9%
– Building land prices by a record 17%
Since 2019, prices have increased:
– Apartments by 67%
– Houses by 54%
– Building land by 72%
This reflects a deep imbalance between supply and demand and signals that normal market mechanisms – such as price corrections – simply aren’t functioning.
Supply exists – but only on paper
Municipal and urban planning documents show a large amount of land designated for construction. In practice, however, very few plots are actually ready to build on. The main reason is the lack of utility infrastructure. Without basic services, this land remains “virtual” – it can’t be used, and municipalities don’t budget for its development.
Add to that the lengthy and complex permitting process. From concept to occupancy, a residential project can take 6 to 9 years. In some cases, such as the Schellenburg project in central Ljubljana, even 20 years.
Meanwhile, landowners bear almost no holding costs – taxes are negligible or non-existent – so they have little incentive to sell. This artificially limits supply and drives prices further up.
Construction is more expensive – and there’s no one to build
Since 2019, the cost of construction materials and labor has risen by more than 50%. At the same time, a labor shortage is growing: young people are avoiding construction trades, and the sector remains heavily reliant on foreign workers.
Tax policy and regulation – uncertainty and red flags
The real estate tax system is unclear and largely ineffective. Instead of tackling the real issues around supply, authorities are discussing questionable measures such as taxes on private property or restrictions on short-term rentals. These add further uncertainty for owners and investors.
Unlike sectors like healthcare or pensions, where at least some reform efforts are visible, the areas of spatial planning, construction regulation, and real estate taxation are overdue for serious, systemic changes. Without them, there’s little hope of stabilizing the market.
Forecast: no crash, but no growth either
It appears that the market peaked in 2024 and is beginning to cool. The highest risks lie in the secondary housing market and high-priced building plots. In some areas, prices are already stagnating, and further decline in transaction volumes is expected in 2025.
If the downward trend continues at the current pace, there is a risk of a more serious market correction. However, a sharp drop in prices is unlikely due to the persistent shortage of new housing and land, especially in Ljubljana and other major cities.
