Apartments in Ljubljana Increasingly Unaffordable

By , 06 Nov 2018, 14:20 PM Lifestyle
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STA, 5 November 2018 - A study presented in the capital on Monday shows that apartments in Ljubljana are becoming increasingly out of reach for an average household due to several factors. The average age of apartments is increasing, as there are too few new housing projects, while the rental market is unregulated, the authors of the study warned.

Carried out by the Ljubljana Faculty of Social Sciences and the Institute of Spatial and Housing Policies, the survey is based on statistical data, an on-line survey and interviews with experts in real estate.

It shows that the average age of apartments is increasing and becoming inadequate considering the structure of the population, as the number of single or two-member households is going up due to the population ageing.

Despite this fact, the prices of apartments in Ljubljana continue to grow and apartments are becoming increasingly hard to afford.

According to the study, the prices are growing at a faster pace than wages, with the average prices increasing by 26% in the 2011-2017 period, and wages increasing only by 5%.

Špela Perner of the institute noted that in 2014, 84 average monthly wages were needed to buy a 50-square metre apartment in Ljubljana, with his number increasing to 101 in 2017.

Only 16% of the apartments in the capital were built after 1991 and an average resident of Ljubljana has less usable living space than the average Slovenian.

More than half of the 900 surveyed people would like to live in a different apartment, mostly because they believe their apartments are too small, they want to be independent from other household members, because they are too expensive or inadequate.

The study also shows that apartment construction significantly lags behind the growth of population. Between 2008 and 2017, the number of residents in Ljubljana was up by 15,500, while the number of apartments was up by 3,300.

16,000 too few apartments in Ljubljana

The authors have estimated that the apartment shortage in Ljubljana in 2025 will stand at 16,000, noting that the local authorities have not been investing enough funds in housing, even though they invested more than other municipalities do.

The number of non-profit apartments is also too low considering the number of people eligible, with the local authorities being forced to subsidise the leasing of such apartments at a 40% rate.

The authors have thus recommended to the Ljubljana Municipality to demand from the state to take certain measures, including additional taxation of empty apartments and stricter supervision of the rental market.

The municipality should earmark more funds for the construction of public non-profit apartments, support the development of housing cooperatives and prevent apartments becoming an investment, including by limiting short-term rentals to tourists.

Related: Analysis of Ljubljana’s real estate market sees bubble

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