Slovakia's Housing Market Faces Slowing Demand and Rising Prices

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The Slovak property market saw a sharp increase in transactions at the end of 2024, driven by the anticipated VAT hike, lower mortgage rates, and Christmas developer discounts, according to Barikáda. However, demand is expected to slow in early 2025.

Analysts predicted that late 2024 would be the most favorable period to purchase property, due to the combination of lower taxes and seasonal sales. The effect was immediate: in October, the volume of mortgage lending increased by one-third — the highest in two years.

According to BuiltMind, Q4 2024 saw a 70% rise in apartment sales in Bratislava compared to Q3, reaching 821 transactions — nearly half of the city’s annual total. By the end of the year, Bratislava had 3,353 listed units across 96 projects, and nearly 1 in 5 of them were sold in Q4 alone.

The main reason for the buying surge was not just low interest rates, but fears over the VAT increase. As a result, analysts expect a decline in demand in early 2025. “We expect the Bratislava market to cool slightly after the record quarter. But by late spring, we forecast 650–750 transactions per quarter,” BuiltMind noted.

Prices, Supply, and Buyer Preferences

Despite booming demand, apartment prices in Bratislava remained stable in Q4. They’re already at record highs — around €5,200 per m² — and may continue to grow. This trend has shifted buyer focus toward smaller, more affordable units, such as 1- and 2-room flats, especially in suburban neighborhoods like Rača, Komisárky, Východné, Bory, Dúbravka, and areas near the airport.

The strong sales momentum led to a decrease in available supply, especially in the lower-price segment — which in turn is pushing up average listing prices. The VAT hike also raises construction costs, adding further upward pressure.

Risks: Taxes, Inflation, and Limited New Supply

The VAT increase doesn’t just affect construction — it impacts the entire economy. Higher taxes are expected to reduce Slovak households’ purchasing power and affect mortgage affordability.

Daily Weby also reported that property prices will continue to rise in 2025. Vladimír Kubrický of the Slovak Real Estate Union explained that the market is inherently slow-moving and that after entering a growth phase in 2024, it is likely to stay on that trajectory.

According to Kubrický, while no housing boom is expected in 2025, double-digit annual price growth wouldn’t be surprising. Construction remains weak, and the number of new apartments will barely grow, adding more pressure on prices.

The European Commission forecasts that higher taxes, the end of energy subsidies, and fiscal consolidation will dampen domestic demand in Slovakia. GDP is projected to grow only 2.3% in 2025, accelerating slightly to 2.5% in 2026. Inflation is expected to rise to 5.1% in 2025 before stabilizing at 3% in 2026.

Despite economic headwinds, average wages should increase, and interest rates may fall from 4% to 3%, potentially improving access to mortgages.

Summary

- Record Q4 2024 sales in Bratislava driven by tax and rate shifts
- Demand expected to decline temporarily in early 2025
- Prices remain at record highs (~€5,200/m²) and may climb further
- Buyers prioritize smaller apartments and suburban locations
- Supply of affordable homes is shrinking, pushing prices higher
- VAT increase will raise costs across the market
- No boom expected, but moderate-to-strong price growth likely.