Housing Affordability as Risk Allocation: Household Perceptions and Housing Market Expectations in Slovenia

Housing affordability is commonly analysed through price-to-income ratios and housing cost burdens. However, housing systems also function as mechanisms that distribute financial and stability risks across households through tenure structures and institutional arrangements. This study examines housing affordability as part of a broader process of risk allocation within housing systems. Using survey evidence from Slovenia—a high-homeownership system shaped by post-socialist privatization and a limited rental sector—the analysis investigates how households perceive housing affordability and how these perceptions influence expectations regarding future housing market developments. The results show that lower perceived housing affordability is associated with stronger expectations of future housing price growth. Expectations regarding housing purchase price growth are also strongly linked to expectations of future rent increases, suggesting that households interpret both dynamics as part of broader housing market pressure. Regional differences in perceived housing affordability are marginally significant, indicating spatial variation in housing conditions. Respondents who recently participated in the housing market report significantly different expectations regarding future housing price developments. These findings highlight the importance of understanding housing affordability as a perception-based mechanism embedded within broader housing systems.