Housing prices in Slovakia continue to rise, analyst warns of long-term market shifts
Housing prices in Slovakia rose by 13% year-on-year in the first quarter of 2025, according to data from the Slovak Statistical Office. This marks the first double-digit increase since the third quarter of 2022, suggesting a renewed rise in demand after a brief slowdown.
Matej Horňák, an analyst at Slovenská Sporiteľňa, noted that falling mortgage rates and a strong labor market are contributing to the renewed growth in housing prices. However, he cautioned that these trends are occurring against a backdrop of limited supply, which continues to lag behind the country’s needs.
Horňák emphasized that while current conditions support continued price growth, Slovakia faces significant demographic challenges that could reshape the housing market in the long term. He expects the structure and accessibility of housing to change as a result of these shifts.
New and existing properties both recorded notable price increases, rising by 10% and 14% year-on-year, respectively. Regionally, the Bratislava area saw the most significant growth, with prices rising by 27%. Double-digit increases were also observed in the Nitra, Košice, Žilina, and Prešov regions.
The recovery in the mortgage market is another factor supporting housing demand. In April 2025, the volume of new mortgages exceeded €680 million, the highest since 2022. The average interest rate on new mortgages has fallen to 3.7%, 0.8 percentage points below the previous year’s peak, providing further stimulus to the market.
Despite strong demand, the supply of housing remains constrained. While transactions involving existing properties continue, building permit statistics do not indicate a significant increase in new housing construction. In the last quarter of 2024, the number of housing starts declined by 15% year-on-year, and the number of completed units fell by 16%.
Horňák pointed out that Slovakia has the highest average household size in the European Union, with an average of 3.1 people per household compared to the EU average of 2.3. This indicates an ongoing need for more, and more affordable, housing options.
While demand remains strong and borrowing conditions have improved, Horňák warned that the gap between housing prices and household incomes is widening. This could slow the rate of price increases going forward.
Looking ahead, demographic trends such as an ageing population and a potential decline in overall population are expected to alter housing needs. Future demand may shift toward smaller, more accessible, and better-equipped housing units, potentially easing pressure on the market over time.
Source: SITA
