Housing Tenure Preferences in the Post-privatisation Period: The Case of Slovenia

The privatisation of social housing transformed many transitional countries in Central and Eastern Europe into societies with predominant homeownership and a marginalised rental sector. The case of Slovenia shows that, despite a low level of government support of homeowners, the homeownership rate has remained at its unsustainably high level and households continue to express strong preferences for homeownership. The paper explores factors explaining current homeownership preferences in Slovenia. A comprehensive model of housing preferences is built. The model follows the proposition that tenure preferences are strongly influenced by general cultural norms and factors characterising the social, economic and political environments. The model is tested using structural equation modelling based on a survey of Slovenian households. The results reveal that the strong preferences for homeownership in Slovenia can be explained by the firm perceptions of the financial advantages of homeownership and by the lack of available rental alternatives.