OECD Economic Surveys: Slovenia 2024
The Slovenian economy proved resilient following the energy crisis and devastating floods. Growth is projected to pick up gradually. The labour market remains tight, with widespread labour shortages leading to strong wage growth. Inflation has slowed but remains elevated in services. Fiscal consolidation is needed to rebuild fiscal buffers and address emerging pressures from ageing-related cost, notably on pensions. Productivity growth would benefit from lifting remaining barriers in retail trade and restrictions on professional services. Female labour market participation is high, but the gender wage gap could be reduced further through adjustments in the tax and benefit system. Greater harmonisation of carbon prices, notably the removal of reduced tax rates for fossil fuels, is needed to reach emissions targets. High homeownership rates and a limited rental market, combined with insufficient residential construction, constrain housing options for many, especially the young and vulnerable. Enhancing housing supply can be achieved by streamlining spatial planning and permitting systems, reforming housing taxation, improving rental regulations, expanding access to mortgage finance, and promoting the development of social and affordable housing.
SPECIAL FEATURE: ADDRESSING HOUSING MARKET CHALLENGES
Housing market challenges and policy options
Slovenia's current housing challenges are characterised by strong demand and inadequate supply, exacerbated by rising construction and financing costs. High ownership rates mask the affordability challenge for younger cohorts or those who want to move amid limited rental markets and insufficient residential construction activity. This chapter proposes a range of policy options to make housing more efficient, inclusive and sustainable. Streamlining spatial planning and permitting systems would foster housing supply responsiveness. Levelling the playing field in rental markets and overhauling real estate taxation can boost market efficiency. Enhancing access to mortgage financing and improving framework conditions for the provision of social housing would expand housing options for households. Finally, housing policies should aim at accelerating the transition to a net-zero economy by aligning energy taxation more closely with the carbon content of the source, strengthening the support programmes for renovation works and improving framework conditions for the deployment of district heating and electrification.
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