STA, 15 March 2019 - The Slovenian housing market showed signs of a slowdown in 2018 after a recovery that started in 2015. The number of real estate deals was down by around 10% last year compared to 2017 and their total value by 5%. Prices however continued rising, in particular in the capital, shows the annual report of the Mapping and Surveying Authority (GURS).
While the number of deals decreased for all types of real estate, the contraction was the biggest for apartments, especially in Ljubljana and its surroundings.
GURS argues that the decrease, coming despite rising demand, is the result of a lack of new construction and of the strong price growth in the last three years.
Demand continued to be fuelled by favourable socio-economic circumstances - especially low interest rates, access to loans, economic growth, new jobs and rising wages - and is gradually also encouraging a new housing investment and construction cycle around the country.
The new cycle first began in Ljubljana and on the coast, where demand is also strongest, but it failed to keep up with demand last year. According to GURS, a noteworthy amount of new apartments can only be expected on the market from the second half of this year onwards.
While turnover decreased, prices continued rising. The prices of used apartments were up by 10% on average at the level of the entire country compared to 2017 and by 22% compared to 2015 when the market bottomed out.
Prices rose the most in the first half of 2018 and stagnated in the second half of the year before rising again slightly at the end.
The prices of houses, which have been rising more slowly than those of apartments after 2015, were up by 8% in 2018 but saw a downward trend in the second half of the year.
Despite strong growth in the past three years, apartment prices remain below the record figures of 2008. Ljubljana is an exception here, having experienced by far the highest growth.
The business property market saw turnover decrease by around 10%, while a slight contraction was also recorded for the building plots market despite strong demand - GURS highlighted a notable increase in prices as a reason.
Farmland experienced a marked drop in the number of deals after a record year in 2017 and prices decreased slightly. The number of deals in forest land was also down, but prices increased a little.
STA, 25 February 2019 - As tourism in the capital is booming and the city is venturing into congress tourism, investors are looking for ways to meet the demands of the market. The latest such project is a new luxury hotel to be built very close to the city centre.
The construction of the hotel, which will be located near the headquarters of the public broadcaster RTV Slovenija in Kolodvorska Street, is expected to start before summer.
The investor, the company Clippus, has estimated the project at EUR 8m.
The approximate locaton of the new hotel
The Neuhaus Kolodvorska building with big glass windows and green terraces will feature 49 hotel rooms and seven luxury apartments.
The seven-storey building will also boast an outdoor pool, a protected parking lot and basement.
See images of the planned hotel, and learn more about it (in Slovene) here
Being close to the city centre, it will offer a view of Ljubljana Castle, a landmark of the capital, said Peter Cesar of the architectural studio Arhitektura 2211, which is designing the building together with the Kosi studio and other partners.
According to Cesar, this will be the first building in Ljubljana where owners or users of apartments will be able to use hotel services such as a 24-hour reception, security, cleaning and maintenance and a restaurant.
Buyers of the apartments will also be able to rent them out as part of the hotel.
The builder Kolektor Koling plans to finish the project at the end of 2020.
The hotel is to be run by Clippus, which has been founded by Iztok Lampič, who runs one of the biggest land surveying companies in Slovenia, Gekom, and Cesar.
The apartments have not been put up for sale yet.
STA, 19 February 2019 - Contrary to previous announcements, the Finance Ministry has now said it will be impossible to introduce the new real estate tax in 2020 as planned because data on some types of property remain faulty.
"Even though much has been done in recent years, not all the registries have been put in order to such an extent as to remove obstacles to the introduction of the real estate tax," the ministry told the STA.
The new tax, which is to replace the current levy for the use of building land, property tax and forest road fee, has been years in the making and put off several times because of its unpopularity.
An earlier attempt at introducing such a tax failed in 2014 after the Constitutional Court quashed the property appraisal act, which was to underpin the new system.
"The biggest obstacle to the real estate tax at the moment is that data on actual use of land for public roads and public railway infrastructure will probably not be available in time," the ministry said.
It specified that the most problematic issue was data on municipal public roads.
One problem could be if such plots were to be exempt from tax, considering that a large section of such infrastructure is still located on privately held land.
The Finance Ministry has been encouraging municipalities to do their part of the job in terms of these data, because receipts from the real estate tax would be their source of revenue.
"All obstacles to introducing the real estate tax will have been removed once these data have been put in order as well," the ministry said, adding that this was the job of the ministries of environment and infrastructure.
Earlier this month, the newspaper Dnevnik reported that compiling a census of 1,200 kilometres of rail tracks and 39,000 kilometres of state and municipal roads did not begin until recently, mainly due to delays at the Infrastructure Ministry.
The legislation for the registering of the actual use of land for public roads and railway infrastructure was adopted in February 2018 and the appertaining rules only just before the end of 2018.
The census of plots of land with state roads is to be completed by June, but the problem is said to be the 32,000 kilometres of local roads which local officials do not think will be completed in less than two to three years.
All our stories on real estate in Slovenia can be found here
STA, 4 February 2019 – The newspaper Delo looks at Slovenia's housing policy in Monday's front-page commentary noting that "the fundamental problem of housing policy at the national level is that it does not exist."
Slovenia designed a housing policy in the second half of the 1990s, but most subsequent policy changes have been ineffective.
The last building boom took place a decade ago, when the state finished major works on the motorway network and construction giants needed new projects. Many projects failed miserably because of the economic crisis.
"But housing construction should not be the result of booms, it should be framed by a clear housing policy underpinned by expected demographic trends," the paper says in Where Are the Foundations of Apartments?
The commentator points to the forthcoming launch of the Magna paint shop near Maribor and wonders whether anyone has considered where all the new workers will live and how they will get home, and whether the appropriate infrastructure to serve them will be built.
"This should not be perceived as a problem to be solved, but rather as a business opportunity for the state to extract the most out of every project.
"The fact is, tax revenue depends more on this auxiliary infrastructure - exploitation of all external effects of an investment - than tax inspections and higher tax rates."
STA, 16 January 2019 - Preparation works have started in Ljubljana's Šiška borough for the construction of what will become the two tallest residential buildings in the country. The two 85-metre towers, expected to be completed by the end of 2020, will feature around 220 apartments.
The project, located opposite the Celovški Dvori housing complex near the northern section of the capital's ring road, is the brainchild of Izet Rastoder, the owner of Slovenia's biggest tropical fruit importer.
Estimated at EUR 40m, the investment is managed by Rastoder's subsidiary Spektra Invest, which is half-owned as of the end of last year by Podgorica's Zetagradnja, the biggest investor and builder in Montentegro.
The two 21-storey buildings will come with a commercial and business section in the ground floor and with a 420-space underground parking garage.
According to the newspaper Delo, Spektra Invest announced last autumn that the prices of the new flats would not exceed current prices of used flats even though they could be classified as prime housing.
The Rastoder group, mostly known for its banana imports, has been engaged in real estate project since 2014, when it bought the site in Ljubljana's city centre later used by Serbia's Delta to build Intercontinental, the country's only five star hotel.
In 2017, Rastoder also bought the still undeveloped commercial section of Ljubljana's Stožice sports complex, as well as Hotel Bellevue, the capital's former landmark hotel that has for a while been in a state of disrepair.
STA, 16 January 2019 - The Slovenian Housing Fund plans to start building two housing complexes in Ljubljana and Maribor this year. In the capital, some 110 apartments for young people will be built, while in Maribor the new complex will offer some 400 apartments with an underground garage.
The fund has already filed for the construction permits and expects construction to start this year.
The youth complex in Ljubljana will be located in the Vič borough, where there are several student facilities already. The new apartments with either one-bed or two-bed rooms will be intended for young people aged between 18 and 29 who want to study or live in Ljubljana.
The 110-room facility will also feature an intergenerational centre, a kitchen with a dining room, a living room, an office, a maintenance room with a separate entrance and an atrium, the Housing Fund said.
According to the fund's head, Črtomir Remec, the construction is to start in the first half of the year.
In the southern part of Maribor, near the city's landmark hill Pekrska Gorca, several two-storey apartment buildings will be constructed in the form of four unfinished squares.
Each building will have a basement, ground floor and two floors, with the complex offering a total of some 400 apartments, 35 to 80 square metres big. Each apartment will also have an underground garage space.
In the first phase, 212 apartments will be built and another 188 in the second, Remec said.
A total of 60 apartments in the complex will be intended for elderly people who need assistance, while the centre will also feature a daycare centre for the elderly, and some shops and offices.
The two projects are in line with the Housing Fund's goal of providing 2,000 new apartments for rent by 2020 and three times as many by 2025 to have a total of 10,000 publicly-owned apartments available for renting.
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