Slovenian real estate market started developing in 1990 when Slovenia became an independent country. However, in the first decade the development and growth were relatively slow, which is mainly attributable to unresolved ownership issues (and many pending court proceedings related therewith) and tax regulation valid at that time. From the late 90-ies onwards (and especially after 2004 when Slovenia became an EU member state) the Slovenian real estate market enjoyed continued and constant growth until 2008 when the market peak was reached (in terms of number and value of transactions). This was followed by a sudden collapse of the real estate market in 2009 which occurred as a result of the global financial crisis and the internal real estate bubble burst. Although some signs of recovery of the market showed at the beginning of year 2010, we suffered further setback in the following years all until 2015 (this was mainly due to the credit crunch, decreased demand, bankruptcy of many big construction companies which resulted in excessive supply of real estate in the market).
As from 2015 we have enjoyed a continued growth of the Slovenian real estate market which reached record number of transactions in 2017. Until the COVID 19 crisis our real estate market was stable, attracting interest from both institutional and private investors. Safe business environment and good location attracted both, domestic and foreign investors in nearly all sectors of the market (e.g. residential, office, retail, hotel and leisure, logistics market; also investments into production facilities). There was and still is a lack of availability of residential and office real estate. Insufficient availability of land with greater surface area at attractive locations (which would be appropriate for construction of bigger residential and business buildings or industrial facilities), lengthy and burdensome proceedings related to acquisition of permits and low liquidity in the Slovenian real estate market allegedly prevent its further significant growth.
The current COVID 19 crisis already affected the Slovenian real estate market. Real estate agencies reported huge drop of real estate transactions and it is foreseen that the hotel, accommodation, and leisure sector will be among the most affected ones. The consequences of the COVID 19 crisis may not yet be estimated at this time and would depend also on the effectiveness of measures adopted by the government with respect to COVID 19. However, numerous institutions and reputable experts agree that the COVID 19 crisis will lead to severe global economic recession. As regards Slovenia the forecasts published by the Institute of Macroeconomic Analysis and Development and the Bank of Slovenia show that the decrease in the Slovenian GDP may amount to up to 16% and that Slovenia will face a recession as a result of COVID 19 crisis. This will undoubtedly have a significant impact also on the Slovenian real estate market.