Delo recently published an article on Ljubljana’s real estate market with the headline “Housing in Ljubljana is becoming cheaper” (Stanovanja v Ljubljani so se pocenila). While the messages conveyed were rather mixed, overall they suggested a stagnating market due to the lack of new housing being built and potential buyers unable to afford a property.
In the first half of 2018, the Geodesic Administration (GURS) recorded only 190 sales of new apartments – the primary market – a fall of 54% compared to the second half of 2017 and 62% less than seen in the first half of 2017. The primary market thus accounted for just 4% of all sales in the capital, while in 2015 this figure was around 12%, due to the sale of new housing stock from projects hit by the financial crisis. Moreover, Q3 2018 saw just 41 new apartments sold in Ljubljana, the lowest number since 2007.
This figure, from GURS' report, shows the average prices of properties around Ljubljana, in Ljubljana, Maribor, on the coast (not including Koper) and in Celje, from summer 2015 to summer 2018
Since many purchases of new apartments in the capital require the sale of two or more older properties, this fall in the number of new units being bought has the effect of reducing the amount of used real estate coming on to the market, as noted by Boštjan Udovič, the director of the Chamber of Commerce for Real Estate at the Chamber of Commerce and Industry. Delo also reports that in Q3 2018 1,385 properties classed as second homes were sold in Ljubljana, 26% less than the quarterly average in 2016.
The article, which can be read (albeit in Slovene and behind a paywall) here, concludes with an uncertain forecast for the year ahead, stating that while the demand for housing does outstrip supply in Ljubljana, indicating some upward pressure on prices, if people are unable to afford a purchase then prices will eventually fall.
House Hunters and it’s 15 spin-offs are now up to an incredible 173 seasons and over 1,700 episodes (Wikipedia), and thus there’s a good chance you know some of the places where properties are being sought, and possibly even the buyers. The most recent episode of House Hunters International, which aired in the US earlier this week, is the third featuring people I know. The show follows the Andrew Anzur Clement and his parents, Terry and Bill, as they look for a new home in Ljubljana, and provides an interesting, if somewhat staged, look at part of the real estate market in the capital.
Viewers wishing to learn more about the production of the episode are directed to Terry Anzur’s website, where she’ll be publishing two stories about the filming, which took place in the US and Slovenia, just as soon as the production company lifts its embargo. They can also read an interview with Terry here, and another with Andrew here.
Finally, all our stories on the real estate market in Slovenia can be found here.
STA, 7 January 2019 - The business newspaper Finance speculates about real estate market trends in Slovenia in Monday's editorial, finding in a retrospective that the best time to buy property is over.
In the headline the paper quotes a real estate agent who says that he would have bought everything a few years ago had he known how the market was going to turn.
The paper notes that after a period of re-awakening prompted by favourable housing loans and banks' venturing into property auction lending, a period of "real-estate frenzy" followed.
One example is an auction of flats in the Savski Breg estate in the Ljubljana Črnuče borough [see map] in 2016 at which the most expensive item, a five-bedroom flat measuring more than 100 square metres plus a 30 square metre terrace and two parking places, was sold for EUR 180,000, VAT included.
A much smaller, 3.5-bedroom flat, on the same estate is listed for sale today at more than EUR 200,000, the paper notes, adding that the market will tell whether the price is realistic.
"Looking back, the best time for buying real estate is over (...) But there is still demand, in particular for new apartments in the capital. This is part of the reason why many private investors have been announcing new housing projects."
The paper has calculated that about 1,500 new apartments will hit the Ljubljana market in a year or two.
However, the paper also calls for caution. "Warnings coming from business are not promising. Some are talking about the economy's cooling and the pessimists are even talking about a new crisis looming."
The paper says that market developments will depend on the price of loans and on whether people will still have jobs to repay loans.
It also notes that uncertainty may affect demand, advising extra caution to investors who say they will be offering buyers above-standard apartments, which it says will be the first that people will give up in case of a crisis.
All our stories tagged “real estate” are here
STA, 3 January 2019 - The construction sector in Slovenia expanded for the second year in succession in 2018 and the Chamber of Commerce and Industry (GZS) expects the growth to continue in 2019 although at a slightly slower pace.
The value of construction work rose by 18% year-on-year in 2017, while it grew by 21.5% in the first ten months of 2018, data from the Statistics Office show.
"The growth was expected because the scope of construction at the end of 2017 was low despite the high growth of the sector," the head of the Chamber of Construction and Construction Material Industries at the GZS, Jože Renar, told the STA.
The value of work on civil engineering in the first ten months of 2018 rose by 21.7% from the same period a year ago. Work is under way both on road and railway infrastructure.
"Intensive road maintenance work is under way to make up for the backlog of recent years when the state reduced road maintenance to far below minimum ... Extensive renovation work is also under way on railways," Renar said.
The construction company Pomgrad, which built the Magna Steyr paint shop near Maribor and is currently working on three major infrastructural projects with partners, recorded good results in 2018. Its consolidated revenue for the year is expected to reach some EUR 160m.
The company is focussing on exports, having built a hotel in the Plitvice Lakes National Park in Croatia and a housing complex in Sweden in the past year.
"We made a big step primarily in internationalisation and have several important deals under way abroad. We also finished several major construction projects in the domestic market, among them the new Magna factory in Hoče, which we successfully built in an extremely short period of time," CEO Iztok Polanič told the STA.
Construction of buildings expanded by 20.8% in the first ten months of 2018. "Construction of buildings is on the rise, both for private and business buildings, where unlike in the civil engineering projects private investors prevail," Renar said.
The GZS expects growth to continue in 2019 but it is not expected to be double digit as in the last couple of years. "We're counting on growth in civil engineering section and in buildings to be comparable," said Renar.
Although Slovenia's economy has been expanding rapidly and all construction companies in the country are very busy, the construction sector faces many challenges and problems, Polanič said.
"A key challenge is definitely the lack of engineering staff, a problem virtually all construction companies in Slovenia are struggling with.
"Another challenge is the unpredictability of projects and investments, which makes long-term planning in construction extremely difficult," the Pomgrad CEO said.
According to Polanič, the company will this year focus on infrastructural and industrial projects, it also counts on several new calls for applications in roads and railway infrastructure.
"We are starting the new year quite busy and will start working on a few new projects ... It's important for our company to win projects that occupy the entire Pomgrad system," he said.
According to Renar, the GZS expects the state to adhere to the international rules on tenders in the future and avoid "risky non-transparent contracts."
The state should prevent unfair competition by companies that are not bound to respect the collective bargaining agreement of the constructions sector, he said.
Related: All our stories tagged "property" can be found here
STA, 21 December 2018 - Prices of residential properties in Slovenia kept rising in the third quarter of the year but transactions were few and prices of newly built homes fell, data from the Statistics Office show.
Prices of all residential properties in the third quarter increased by 1.9% on the quarter before and by 15.1% year-on-year.
Prices of newly built homes fell by 15.8% over the previous quarter and only 63 newly built residential properties were sold in the third quarter.
Prices of new flats dropped by as much as 19% quarter-on-quarter and prices of new family houses decreased by 1.5%.
However, year-on-year, prices of newly built flats were up 10.1% and prices of newly built family houses were 9.4% higher.
With 1,951 existing residential properties sold in the third quarter, prices of existing homes increased by 4.1% over the previous quarter.
Prices of existing flats in Ljubljana decreased by 1.8% in the third quarter, but were still 8.9% higher year-on-year.
Prices of existing flats in the rest of the country went up by 1.9% quarter-on-quarter, rising by 10.6% year-on-year.
Prices of existing family houses rose by 11.4% from the quarter before and by as much as 26.3% year-on-year.
A report by the Surveying and Mapping Authority, also issued today, showed that the number and value of real estate transactions in the first half of the year fell from record figures in 2017 but were still high.
The prices were still below the record levels of 2008, but inched very close after strong growth in the past year.
Around 17,500 real estate transactions were recorded between January and June, up from 17,400 in the second half of 2017 but down from 19,300 in the first half of 2017.
The combined value of real estate transactions in the first half of the year was EUR 1.16bn, up from EUR 1.19bn in the second half of 2017 but down from the record EUR 1.21bn in H1 2017.
Two-thirds of the transactions involved residential properties, flats (38%) and houses (26.5%). Commercial and industrial real estate represented 15% and building plots 10%.
Transactions in farmland and forests accounted for 3% of all transactions, while other types of real estate represented 7%.
Average price of a second-hand flats in the first half of this year was 6% up from the previous six months and 11% higher from the first half of 2017.
Compared to 2015 when prices bottomed out, apartment prices were up by 22%, while average prices were still 4% bellow all time highs of 2008. Prices of houses were 10% below the peak.
High demand has been driving up prices of residential properties in Ljubljana and on the coast with the average price of existing flats in Ljubljana rising above 2008 levels to EUR 2,770 per square metre.
High prices in the capital city, which accounts for one out of four apartments sold in the country, also drove up average prices of second-hand apartments in Slovenia, which rose to EUR 1,750 per square metre.
Trading in commercial properties has begun to stagnate and prices have been stagnating for the past three years.
Most transactions involved office space, with existing office space transactions accounting for two-thirds of all transactions in commercial properties.
Trading in building land has stabilised but prices are up. Most of the plots were bought for family houses. More than 20% of the plots were sold in Ljubljana and its surroundings.
More data on this topic can be seen at SURS
STA, 27 November 2018 - MPs failed to pass in a re-vote on Tuesday a reform bill on real estate agencies which was to improve the legal certainty of consumers as well as realtors. The upper chamber vetoed the motion in March, claiming that it excessively regulated the field.
While today's vote ended 42:10 in favour of the bill, absolute majority of 46 out of 90 MPs would have been needed in the re-vote.
Only four of the five coalition parties supported the bill, while the Alenka Bratušek Party (SAB) did not present its view.
The Marjan Šarec List (LMŠ), SocDems, Pensioners Party (DeSUS) and the Modern Centre Party (SMC) said that the bill would protect consumers and provide for the legal safety of all stakeholders on the real estate market.
But the opposition parties New Slovenia (NSi) and the National Party (SNS) agreed with the objections to the bill voiced by real estate agencies, who argued that the bill would restrain agencies too much.
In contrast, the opposition Left opposed it for allegedly not bringing enough regulation.
All our real estate in Slovenia stories are here
The opposition Democrats (SDS) did not present its arguments.
The National Council, the upper chamber of parliament, vetoed the bill in March at the initiative of a group of councillors led by Mitja Gorenšček, the executive director of the Chamber of Commerce and Industry (GZS).
The bill was initiated by the GZS's real estate agencies section but after it was amended at parliamentary committee level, the group turned against it, saying that it envisaged excessive regulation by capping the provision in real estate deals with individuals at 4% (which is in line with the existing law), by limiting provisions in rental deals to one-month's rent and by setting the maximum costs in case of no deal at EUR 150.
Harsh winters, the need for repairs, and poor infrastructure turned out to be nasty surprises for those who bought from afar.
STA, 25 September 2018 - Real estate prices continued to rise in the second quarter of the year, but data released by the Statistics Office on Tuesday also show that the lowest number of new housing units on record have been sold in this period.