Slovakia’s housing market faces decline as apartment completions hit six-year low

Slovakia’s real estate sector experienced a significant downturn in 2024, with the number of completed apartments reaching its lowest level in six years. The decline reflects broader challenges in the construction industry, as economic conditions and regulatory hurdles continued to slow development. According to the latest data from the Statistical Office, construction activity fell to an 11-year low, raising concerns about the future of the country’s housing market.

The slowdown was particularly evident in the final quarter of 2024. Between October and December, only 4,900 apartments were completed, marking a year-on-year decrease of nearly 29 percent. This drop represents the weakest quarterly performance in the past 13 years. Within this total, single-family houses accounted for 67 percent of all newly approved residential units, highlighting a shift in housing demand toward private homes rather than large-scale apartment developments.

Regional disparities have also widened, with the capital region performing significantly better than other parts of the country. Bratislava continued to see steady construction activity, reflecting strong demand and the ongoing appeal of urban housing. In contrast, many regional areas struggled with declining investment and fewer completed projects. The Košice region was an exception, recording a 50 percent increase in apartment completions in the last quarter of the year compared to the same period in 2023. This localized growth stands out as a rare positive trend in an otherwise subdued market.

The overall decline in residential construction is attributed to several factors. Rising material costs, high interest rates, and labor shortages have all contributed to delays and cancellations of planned projects. Additionally, economic uncertainty and regulatory changes have made it more difficult for developers to secure financing and navigate approval processes. These challenges have resulted in fewer new housing projects breaking ground, further tightening the supply of available homes.

Market analysts warn that unless there is a shift in policy or economic conditions, Slovakia could face a prolonged period of stagnation in the residential sector. With demand for housing still present, particularly in urban centers, the lack of new supply may lead to affordability issues and increased pressure on rental markets. Policymakers and industry stakeholders will need to address these barriers to encourage new investment and prevent further declines in construction activity.

As Slovakia enters 2025, the outlook for the real estate sector remains uncertain. While the Košice region’s performance offers some optimism, the broader market continues to grapple with economic and structural challenges. The coming months will be crucial in determining whether the sector can stabilize or if further contraction is on the horizon.

Photo: Zwirn, Bratislava – YIT