According to the NBS, a new phenomenon is driving up apartment prices. Therefore, they have a proposal

According to Vladimír Dvořáček, member of the NBS banking board and executive director of the supervision and financial stability department, the main source of risks remains the external environment. The conflict in the Middle East increased geopolitical tensions and negatively affected the global market for energy raw materials. Although Slovakia is not directly dependent on the import of oil or gas from the conflict area, higher energy prices can be reflected in the growth of inflation and, consequently, in the slowdown of economic activity.

At the same time, the domestic economy faces a combination of several factors that hinder its growth. In addition to external risks, it is also about more cautious behavior of households, consolidation of public finances or persistent problems with competitiveness. Weaker growth is gradually reflected in the credit activity of companies, which is starting to slow down.

The situation on the housing market remains a significant phenomenon. The year 2025 brought a continuation of the strong growth of the mortgage market and real estate prices. The demand for mortgages was supported by more favorable interest rates and the growth of apartment prices, but the NBS warns that the mortgage boom has probably already reached its peak. In the next period, the rate of mortgage growth may slow due to a weaker labor market, slower income growth and slightly higher interest rates.

At the same time, apartment prices continue to grow at a double-digit rate, and at the beginning of 2026, their growth accelerated slightly. At the same time, the number of transactions on the market is growing. However, the NBS points out that price growth is not only due to a lack of new apartments, but also to an increasingly significant investment demand. More than half of all residential properties in 2025 were bought by people who already owned at least one other property. At the same time, in large cities, the share of poorly used apartments exceeds ten percent and continues to grow in most monitored locations.

According to the central bank, real estate investment purchases are starting to become an important topic from the point of view of financial stability. Of all mortgages granted last year, 16 percent were directed to clients who already owned at least two properties, and another 39 percent were obtained by people with one property. According to NBS, such demand not only supports the growth of housing prices, but also reduces its availability for households buying their first home.

This is also why the central bank is proposing to amend the rules for providing mortgages. When financing the third and other real estate, the limits of the LTV indicator, i.e. the ratio of the amount of the loan to the value of the real estate, should be tightened. Conversely, young people buying their first home could get more favorable financing conditions.

The current limit on LTV is 80% across the board, meaning that the buyer should have 20% of their own funds. However, for young people under 35, the central bank proposes to relax this limit and move the LTV limit to 90%. However, if someone wants to take out a mortgage for a third or additional property, the LTV limit will be tightened to 70%. The NBS plans to submit the material to the comment procedure and the plan is for the new rules to apply from October 1, 2026, but they are ready to negotiate with the banks about this date.

When asked why they decided to tighten the conditions for the purchase of up to a third property, Dvořáček argued that many clients keep the second property only to bridge the necessary period, for example when moving from one property to another. Therefore, for general simplification, the NBS decided to set these rules only from the third property. According to the NBS, such an approach should not increase the riskiness of the banking sector or significantly affect the volume of loans, but it could change their structure in favor of first homes.

Despite the more difficult economic environment, the ability of households and businesses to repay their obligations remains relatively good. For mortgages, the share of defaulted loans remains low, although some households are more sensitive to higher living costs, more expensive financing and slower income growth. A worse development is visible in consumer loans, where the quality of the portfolio has deteriorated to the level of four years ago.

NBS pays special attention to mortgages provided to self-employed people and entrepreneurs. Today, they represent almost a fifth of the entire mortgage portfolio. According to the central bank, due to the more fluctuating nature of income and the more complicated assessment of their stability, this is a riskier group of clients. Banks should therefore more thoroughly check the quality and sustainability of their income.

The financial situation of companies remains relatively favorable despite the economic slowdown. Although the profitability of companies decreased slightly in 2025, companies were able to offset some of the rising wage and tax costs with lower interest expenses. The share of defaulted loans remains stable, but business lending is slowing down, especially in large companies and industry.

The automotive industry, which is a pillar of the Slovak economy, also requires attention. The sector faces several structural challenges, including US tariffs, growing competition from China and the transformation towards new production models. However, the NBS points out that the risks to financial stability are mitigated by the relatively low exposure of domestic banks to this sector and the ability of producers to redirect part of their exports to alternative markets.

At the same time, the banking sector continues to maintain high profitability, strong capital equipment and sufficient liquidity. According to Dvořáček, the stress tests confirmed that the banks could handle even a significantly more unfavorable economic scenario associated with the growth of inflation and the weakening of the economy. A potential economic shock would increase the volume of problem loans, but thanks to sufficient capital reserves, its impact on the sector would remain limited.

Positive developments were also recorded by insurance companies, pension funds and the collective investment sector. The growth of assets was supported by the appreciation of financial markets and the influx of new clients. However, at the same time, the share of equity investments is growing, which increases the potential for future returns, but also increases the sensitivity of investors to possible fluctuations in the financial markets.