Slovakia recorded a significant slowdown in housing construction in the first quarter of 2025, with the number of completed apartments falling to its lowest level in nine years. The decline is raising concerns among real estate professionals and policymakers about the future availability and affordability of housing. According to data from the Statistical Office of the Slovak Republic, 3,119 apartments were completed between January and March 2025, a year-on-year decrease of 24%. Compared to the ten-year average for the same period, completions dropped by 25%, marking the lowest quarterly figure since 2017. Family houses continued to dominate the market, accounting for 72% of completed dwellings. The lack of larger residential projects suggests a slower pace of apartment building, particularly in urban areas where demand remains high. Regional trends revealed uneven development. Six out of Slovakia’s eight regions recorded a double-digit decline in completions. Bratislava, traditionally the country’s most active construction market, saw only 540 apartments completed—more than 50% below the ten-year average. Significant decreases were also reported in the Nitra and Žilina regions. Only Banská Bystrica and Košice showed year-on-year growth, though in Banská Bystrica the increase was largely due to comparison with a low base from the previous year. The number of new housing starts also declined. In the first quarter, 3,198 apartments began construction, the lowest number for a first quarter in 12 years. This represents a 16.7% year-on-year decrease and a 27% drop compared to the ten-year average. Family houses made up 56% of new starts. While some regions, such as Košice and Bratislava, recorded increases in new housing starts, analysts point out that these gains were largely due to a low base effect rather than a true market recovery. Even in Bratislava, new starts remained 21% below the long-term average. Experts warn that the slowdown in both completions and new starts may further constrain housing supply in the coming years. Jana Morháčová, spokeswoman for the Statistical Office, noted that the current trend could lead to deeper shortages in the housing market, particularly in urban areas where demand remains strong. At the end of March, 77,000 housing units were under construction across Slovakia, a 2.9% decrease year-on-year. The limited supply of new housing is expected to exert upward pressure on prices, while increased interest in existing apartments may also push prices higher for second-hand properties. The slowdown reflects broader structural challenges in the construction sector, including high material costs, labour shortages, and lengthy permitting processes. According to analysts, these factors, combined with elevated mortgage rates, are contributing to reduced construction activity. Despite these challenges, there are expectations that recent interest rate cuts by the European Central Bank could ease financing conditions and support the recovery of construction activity. Improvements to administrative procedures under the new construction law, effective from April, may also help accelerate project approvals. Demand remains steady, particularly for smaller and more affordable units. Buyers are focusing on two- and three-room apartments in suburban areas or smaller towns where prices are more accessible. Family houses on the outskirts of cities are also attracting interest due to their relatively lower prices and good transport links. However, experts warn that without more substantial policy measures, including support for rental housing and streamlined planning procedures, the supply of new housing will continue to lag behind demand, leading to further affordability challenges. “The state has the potential to support rental housing development, which could contribute to stabilizing the market. If current trends continue, a more balanced supply could begin to emerge within the next two years, gradually moderating the pace of price increases,” said Tomáš Bohuček, an analyst at 365.bank. Source: Trend.sk