STA, 24 October 2019 - After three years of steep growth, real estate prices started to show signs of stagnation in the first half of 2019. Prices of flats are very close to the record figures seen in 2008, while prices of houses are lagging behind significantly, show data from the Mapping and Surveying Authority.
The average price for a second-hand flat in Slovenia in the first half of 2019 was EUR 1,810 per square metre, which was 1.7% more than in the second half of 2018.
Prices of flats have been growing fast since 2015, when a downward trend finally reverted after the 2008 economic and financial crisis.
Alone in the first half of 2018 the average price for a second-hand apartment increased by nearly 7%, the Mapping and Surveying Authority noted on Thursday.
But the second half of 2018 and the first half of 2019 saw the growth in prices slowing down to 2%, above all due to stagnation of prices in Ljubljana.
The average price for a second-hand apartment in Ljubljana was at EUR 2,780 per square metre between January and June, which was about 0.5% more than in the second half of 2018. The authority says that prices have stagnated in Ljubljana since the beginning of 2018.
A different trend was recorded on the coast, where prices of used flats are growing increasingly fast.
Average price for a second-hand flat on the coast, excluding the town of Koper, was at EUR 2,640, over 7% more than in the second half of 2018. This was also the highest growth rate recorded on the coast since 2015.
Data for Koper show that average price of second-hand apartments was at EUR 2,440, 4% more than in the second half of 2018. Prices of second-hand flats around Ljubljana were at EUR 2,180 (up 5%) and in Kranj they were at EUR 2.060 (up 7%).
Prices of houses have also been growing since 2015, albeit slower than prices of flats. Just like in flats, the biggest increase in prices was recorded in the first half of 2018 and growth of prices started slowing down at the beginning of 2019.
In the first half of the year, the average house sold in Slovenia was 169 square metres big, located on an average plot of 910 square metres, with an average price of EUR 127,000.
This compares to an average price of EUR 128,000 for an average house of 162 square metres located on an average plot of 980 square metres sold in the first half of 2018 and to an average of EUR 120,000 for an average house of 163 square metre on a 890 square metre plot sold in the second half of 2018.
In the first half of the year, prices of houses were highest in Ljubljana, costing EUR 286,000 on average, on the coast (excluding Koper) the average price for a house was EUR 264,000, while houses around Ljubljana cost EUR 193,000 on average.
Construction plots cost EUR 56 on average per square metre, which was about 10% less than in the second half of 2018 and some 3% less than in the first half of 2018.
The number of transactions in the first half of the year reached 17,100, which was 2% more than in the second half of 2018. Deals totalled to EUR 1.33 billion, up 11% over the second half of 2018.
Housing property accounted for 54% of all transactions. Transactions with flats amounted to EUR 432 million or 32% of total transactions, while sales of houses amounted to a total of EUR 290 million or 22% of the total transaction value.
STA, 14 October 2019 - The Environment and Spatial Planning Ministry presented a new housing bill proposal on Monday. The document aims to make housing more accessible to those in precarious jobs, young families and the poor, as well secure more effective management of apartment blocks. It also makes it harder for owners to rent out their apartment through Airbnb.
The bill abolishes non-profit rent and replaces it with what it calls a cost rent, which would amount to up to 5.2% of the cost price of a new apartment.
Depending on location, the cost rent would stand between EUR 5 and EUR 7.30 per square metre, Environment and Spatial Planning Minister Simon Zajc and state secretary at the ministry Aleš Prijon told the press.
Under the new system, those renting out apartments are to make more in rent, however nothing is to change for those renting the apartments, as the difference in rent will be covered by a housing allowance.
This will bring in more money to the national Housing Fund and municipal housing funds, which is to be used for maintenance and construction of new apartments.
Eligibility of renters is to be checked annually, which has not been the case in the past. If the renter will exceed the income limit, they would be able to remain in the apartment but would have to pay a higher rent, up to 1.5 times as high as the cost rent.
Last year, municipalities spent EUR 12.4 million for housing subsidies, while the state contributed EUR 3.8 million.
Under the new system, municipalities will contribute EUR 12.3 million for the housing allowance, while the state is to provide EUR 28.5 million.
Moreover, the national Housing Fund is to establish a rent-out service, a kind of national real estate agency that would facilitate the renting out of empty apartments.
The public service will pay rent, find a renter and make sure that the apartment is returned to the owner in the state it was in before it was rented out, said Prijon.
The ministry expects that this would put between 20,000 and 30,000 apartments on the market, out of 170,000 apartments that are officially empty.
The bill also introduces state guarantees for the young and young families, who are unable to acquire a housing loan with banks.
In case that the loan-taker would no longer be able to pay off the loan, the Housing Fund would become the owner of the apartment, however, the loan-taker would still be able to live in the apartment and pay cost rent.
Moreover, the bill will increase the municipal funds' borrowing limit from 10% of its capital to 50%.
It also changes multi-dwelling management rules, for instance making it easier for residents to change the apartment block management firm.
Also, those who will want to let out their apartments through platforms such as Airbnb, thus changing the intended function of their flat from private to commercial, will have to get the approval of all apartment owners in their building, said Prijon.
The bill also lays out the conditions for housing cooperatives. The Housing Fund would likely contribute plots, while members of the cooperatives would each contribute a part of the cost of construction.
The rest of the funds needed would come from loans taken out with a guarantee from the Housing Fund. Members, who would want to withdraw from the cooperative, would get their contributions returned.
STA, 3 October 2019 - The government confirmed on Thursday a package of tax tweaks that are meant to reduce taxes on labour to increase competitiveness. The list includes increased general tax credit and changes to the income tax brackets to reduce the tax burden on the middle class. On the other hand, the taxation of capital gains and rental income is to rise slightly.
The changes, which the government wants passed in fast-track procedure so they can enter into force with the start of 2020, affect laws on personal income tax, corporate income tax and on tax on profit from disposal of derivatives.
Speaking of a "new step towards tax optimisation", the government said that the "proposed measure will additionally reduce the burdens on labour, whereby we are strengthening competitiveness, preserving a stable economy and contributing to sustainable economic growth".
In general, the changes are designed to increase take-home pay, which will be achieved with a higher general tax credit that all taxpayers are entitled to, by EUR 200 to EUR 3,500.
In an effort to reduce the tax burden on the middle class, the tax rate will fall by one percentage point both in the second and third brackets, to 26% and 33%, respectively.
STA, 2 October - Slovak developer Corwin is planning to build a housing estate in the Ljubljana borough of Šiška. Construction works on what is a EUR 45 million investment are expected to be launched in the first half of 2020 and the first residents could move in at the end of 2022.
The Kvartet housing estate will be built by Šiška Rezidence, a Slovenian company owned by Corwin, near another larger housing estate, Celovški Dvori.
The location of Celovški Dvori estate, which is near the planned development
It will feature four 16-storey towers with a total of 221 flats, as well as areas for some 500 bicycles and an underground car park for some 300 vehicles.
Playgrounds for children and a socialising area for residents are also planned in the green areas around the buildings, Corwin said in a release on Wednesday.
Roman Karabelli, director of Corwin's Slovenian subsidiary Corwin SI, sees Kvartet as a major investment to revitalise what used to be an industrial area near a new large shopping centre planned by retailer Spar.
Kvartet will feature one-, two-, three- and four-room apartments, 33 apartments will be made to suit older people or the disabled, and all residents will have a view of the Alps.
Kvartet has been designed by Ljubljana's architecture studio Ofis Arhitekti, with which Corwin cooperated already on an office and housing complex in Slovakia's Bratislava.
The Slovak developer is now waiting to be granted a building permit, which it expects in the first half of next year.
Corwin bought the 7,000-square-metre plot in Ljubljana in March 2018 from Slovenia's bad bank, where it ended as part of a bankruptcy estate of builder GPG Inženiring.
The asking price was EUR 2.7 million, while the final price was not disclosed, but Corwin says the investment is worth more than EUR 45 million.
It will be financed with own capital and a loan. "We're already discussing financing with some banks in Slovenia," Karabelli told the newspaper Delo today.
Together with the plot, Corwin also acquired GPG Inženiring's plans for a residential development with 180 flats, but eventually changed it considerably.
Karabelli told Delo the company was already looking for new plots and was planning at least one to two new projects in Slovenia.
"We trust in the Ljubljana property market and we believe we have something to offer," said Karabelli, noting the company has rich experience, having built more than 2,000 flats in ten years.
According to Delo, Corwin was set up slightly more than ten years ago and is a leading developer in Slovakia.
STA, 1 October 2019 - A group of 32 MPs has requested that the Constitutional Court review the property mass valuation act. The request, distributed to the press on Tuesday by the opposition New Slovenia (NSi), says that the valuation models used for the estimates, set to serve as basis for a property tax, should have been closely defined by the act.
The models are key in determining the taxpayers' position and must thus be prescribed by the law and not by executive acts, the review request says.
The issues found unconstitutional by the Constitutional Court in 2013 still remain after the act was changed in May 2019, the request says.
The court found in 2013 that the act failed to define individual valuation models and the application of models in value estimated of different types of real estate.
The act also failed to define "actual use of buildings or parts of buildings" and did not define individual types of actual use, the request notes.
The NSi has called a press conference for tomorrow, featuring MP Iva Dimic and the NSi's farmers' branch head Janez Beja.
One of the points in the request says that the valuation system has been set up in a way that will force farmers to sell agricultural land whose purpose is classified as building land.
The act envisages that the value of this type of land be estimated based on classification by purpose, rather than actual use, which would lead to higher taxes. The request says that this will force farmers to sell the land, and to development of agricultural land.
Meanwhile, the Mapping and Surveying Authority (Geodetska uprava Republike Slovenije – GURS) released today preliminary results of mass valuation of property. The results could be used for a number of purposes, including a real estate tax.
However, Prime Minister Marjan Šarec told the MPs in a Q&A today that the government, "in its current constellation is not capable of passing a real estate tax".
STA, 23 September 2019 - Sales of new housing properties have dropped to the lowest level on record in the second quarter of 2019, according to data released by the Statistics Office. Meanwhile, more than 1,360 second-hand houses were sold this second quarter, the most since the second quarter of 2017. In total, sales reached highest value since 2017.
New flats are on the other side of the spectrum, as only 42 were sold, the least since new real estate sales have been recorded. But faring even worse were new houses, with only 18 of them being sold in the second quarter.
The prices of new housing properties dropped by 3.1% over the first quarter. Prices of new houses went down by 9.3%, while apartments grew by 0.3% after growing by 9% in the first quarter.
On the yearly level, prices of new real estate increased by 3.6%: flats went up by 9.3%, while houses were 6.3% cheaper.
Prices of second hand real estate went up by 1.5% over the previous quarter; houses by 2.5% and apartments by 1%. Compared to the same period last year, prices of second-hand properties were up 2.1%; apartments increased by 2.3% and houses by 1.7%.
In total, EUR 330 million deals were closed, the most since the second quarter of 2017, when the figure reached EUR 354 million.
Prices have gone up by 1.3% in the second quarter compared to the first and have grown by 2.2% compared to the same period last year.
Statistical Office of the Republic of Slovenia, SURS, has released figures showing that construction firms performed €2,571 million of construction work in 2018, an increase of 29% on in 2017.
Of this, €1,351 million of construction work was done on buildings (up 35% on 2017) and €1,220 million on civil engineering projects (up 23%).
Most of this construction work was performed on non-residential buildings (€906 million, or 38% more than in 2017).
STA, 15 August 2019 - Slovenia's construction industry is seeing growth for the third year now. Nevertheless, it has still not returned to the levels before the crisis, while some indicators suggest that the growth trend could be reversed in the near future, finds a report by the Statistics Office.
Construction is one of the sectors that was hit hardest by the crisis ten years ago. While most of other sectors, such as industry, commerce and services, have already exceeded pre-crisis turnover, construction still lags far behind.
"After a significant fall in both the turnover and the number of employees and enterprises after 2008, growth was detected again in all three indicators after 2013, especially in 2017 and 2018," reads the statisticians' report.
While the number of construction enterprises has already reached the pre-crisis figures, with 19,220 such enterprises in 2018, the turnover and the number of employees still fall considerably short.
At the expense of the small number of workers, labour productivity increased and amounted to EUR 24,925 in 2018, exceeding the pre-crisis levels.
Construction companies generated a turnover of almost EUR 6 billion in 2018, which is almost 30% less than in 2008 and 34% more than in 2013. Almost half of the turnover was generated by specialized construction activities, 30% through construction of buildings and 21% by civil engineering.
There were 67,600 people working in the sector last year, compared 89,900 people a decade ago. 70% of the workers were Slovenian citizens and 30% foreigners. Most of the foreign workers came from Bosnia and Herzegovina, followed by those from Kosovo, North Macedonia, and Croatia.
Among the 19,220 construction enterprises registered in 2018, micro-enterprises with up to 10 employees prevailed, representing more than 90%. Compared to 2008 there were more than a half fewer medium-sized and large enterprises, however, in this period the number of parent enterprises doubled, which means that smaller enterprises which are interconnected prevail.
Wages in the sector had been increasing until 2011, but fell somewhat between 2011 and 2015, and after 2015 increased again. Average gross monthly pay was EUR 1,290 last year, which is 12% less than in 2008 and 23% less than the national average, despite a 20% growth compared to 2017.
Data on the number of the building permits and the construction confidence indicator suggest an impending decline. The number of building permits issued declined over the past three years and the trend continues in 2019 - in the first half of this year 10% fewer building permits were issued compared to the same period in 2018.
Only the number of residential building permits is somewhat increasing, whereas the number of non-residential building permits issued is falling. Between 2016 and 2018 the surface area of buildings for which building permits were issued increased (8%), as did the number of the apartments in those buildings (by more than 19%).
In the first six months of this year the construction confidence indicator was below the average of the previous year. Expectations for contracts and jobs peaked at the beginning of 2018, but then began to fall. The only exception was the indicator assured work in hand which in the first six months of 2019 was constantly above the average of the previous year.
As limiting factors to doing business, construction companies report in particular the shortage of skilled workers, fierce competition and high labour costs.
STA, 14 August 2019 - The value of construction works in Slovenia rose by 14.4% in the first six months of 2019 year-on-year, shows data released on Wednesday by the Statistics Office. Following a rise in May, the value of construction works decreased by 6.7% in June over the previous month.
In the first half of the year the value of works on buildings rose by 11.9%, whereas the value of works on engineering objects was up by 15.1% compared to the same period in 2018.
Compared to May, the value of works on buildings was down by 8.8% in June and of works on engineering objects by 6.4%.
The year-to-year comparison for June on the other hand shows a 5.4% overall increase for the industry. Standing out is a 9% increase for non-residential buildings, whereas the value of works on residential buildings decreased by 2.1% in June year-on-year.
More details on this data can be found here
STA, 12 August 2019 - More than 60 real estate agencies asked the Constitutional Court on Monday to review a recently adopted bill that limits commission fees for leasing real estate and other costs which real estate agencies can charge their clients.
According to Boštjan Udovič from the Chamber of Commerce and Industry (GZS), the 66 agencies involved want the top court to review and stay provisions limiting service commissions.
They argue the bill encroaches on the right to engage in free enterprise and the right to property, meaning it also violates the European Convention on Human Rights as well as EU law.
"The legislator failed to demonstrate any public benefit that would justify such an intervention in the rights of the plaintiffs. The goals allegedly pursued are general and have to do with housing policy and not with property brokerage," Udovič told the STA.
The legislative changes, originally passed on 11 July and again a week later following a National Council veto, entered in to force on 10 August and protect tenants against paying commissions for services provided by a real estate agency which was hired by the landlord.
They also introduced cap on commissions that can be charged by apartment rental agencies; the capped amount corresponds to one monthly rent, but should not go lower than 150 euro.