Analysis of Ljubljana’s Real Estate Market Sees Bubble

By , 13 Jul 2018, 09:20 AM Business
Tiltshift from the Castle, looking at Novi trg Tiltshift from the Castle, looking at Novi trg JL Flanner

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STA, 13 July 2018 - Commenting on the Ljubljana real estate market in Friday's commentary, the business newspaper Finance says that the Statistics Office, the central bank and the Surveying and Mapping Authority (GURS) do not give sufficient data on the situation in a time when it seems that a new bubble is being inflated in the capital. 

In the first quarter of this year, the average price of second-hand apartments was more than 30% higher than was the 2015 average, the Statistics Office recently said. But its quarterly reports are not detailed enough.

An in-debt analysis is possible only based on GURS's reports, but it decided to scrap quarterly reports during recession. Now it only publishes half-year and annual reports and these come with a significant delay.

"It is mid-July and there is still no annual report for 2017. The absence of good data in a time when everyone is wondering whether a new bubble is being created on the Ljubljana real estate market is not the best sign," the paper says.

Although real estate agencies are announcing numerous new projects, nothing is being built but luxury apartments. Virtually no apartments that would cost up to EUR 200,000 are being built, the paper says.

The appetites of sellers and landlords are of course growing given that the real estate market has come to life again. This is how the market works and currently it seems that there is not enough apartments in Ljubljana.

Given the enormous prices of flats, people will probably start thinking of buying an apartment on the outskirts of the city, which will push the prices up there as well.

The market could only cool down if loans became costlier and at the moment it seems that the European Central Banks is getting ready for a stricter monetary policy, which is reflected in the growing interest rates.

"Money is thus getting costlier, which in theory means that purchasing an apartment suddenly loses its appeal - but that is just theory.

"But no matter how you look at it, the timing for buying an apartment, especially in Ljubljana, seems worse than ever," Finance concludes under the headline “A Few Remarks on Real Estate Market”.

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