Housing real estate prices have been declining since their peak in 2007 and 2008, with data from the Surveying and Mapping Authority suggesting the gradual decline strongly accelerated in 2012.

The trend appears to be continuing this year, as Statistics Office data show housing real estate prices dropped by over 4% in the first three months of the year compared to the same period last year.

The trend coincides with the figures for the construction industry showing a severe contraction. The latest figures from the Statistics Office show the value of construction works in May was less than a third of that in 2008.

The general construction decline has been coupled with rising unemployment, contraction of disposable income and an unyielding wave of corporate bankruptcies to create what can only be described as a buyers' market - if there were buyers.

The decline in home prices is well documented, but now rentals, a poorly tracked market, are being affected as well, according to a report by Monday's edition of the business daily Finance, which says apartment rents have dropped by 30-40% over the past five years.

Real estate agents quizzed by Finance say properties are on the market for 3-6 months before they are rented out, and transactions are closed only if the properties are fully furnished or in good condition, as supply far exceeds demand.

The commercial real estate market has been livelier, as many companies have been taking advantage of lower rent to relocate to new premises. However, reports suggest that office vacancies have been surging.

A December 2012 analysis by realtors Slovenia Invest suggests Ljubljana had an office vacancy rate of 27% at the end of the year, a figure that was expected to rise this year.

This also explains why many commercial projects started in the boom years have been suspended, as evidenced in the gaping holes in the ground in Ljubljana and elsewhere that used to be lively construction sites.

In Ljubljana, by far the largest property market in the country, there are a dozen construction pits where office towers or office-residential buildings were to be erected, the daily Delo reports on Monday.

This includes major sites such as the former premises of the tobacco factory near the city centre, where a EUR 300m project was planned, a massive development on the site of Kolizej, an Austro-Hungarian-era army housing complex, and the new passenger terminal and commercial centre next to the main train station.

The real estate market decline has been so severe in fact that the Surveying and Mapping Authority has decided to reduce the "generalised market value" of real estate, a gauge that will be used to calculate the forthcoming real estate tax.

Dnevnik reports on Monday that the values would be revised down by nearly a fifth, with the biggest revisions carried out for the most expensive locations of Ljubljana, Bled, Bohinj and the coast (14%-17%), while the values in cities like Maribor and Celje will be reduced by a tenth.

The prices of commercial real estate such as bars and restaurants will be revised down by up to 30%.