STA, 16 April 2019 - Slovenia's capital Ljubljana is short of some 4,000 non-profit homes for rent and will not be able to meet the demand on its own, the boss of the municipal housing fund, Sašo Rink, told the city council as it debated the issue on Monday.
With a population of some 280,000, Ljubljana is the largest city in Slovenia and demand for flats, new and second-hand ones, is huge, and so are the prices.
National statistics show that housing prices in Slovenia rose by 18.2% in 2018, although they have not yet exceeded the pre-crisis levels at national level.
However, Ljubljana is different. A recent report said a square metre of a second-hand flat costs almost 2,800 euro on average, or roughly as much as in 2008.
From 2008 to 2015, the prices of second-hand homes in Ljubljana slowly fell by 30%, but then they quickly rose by 35% in the next three years, Finance said.
Rink said Ljubljana's Public Housing Fund would not be able to effectively solve the situation if the state does not provide a systemic source of funds for public homes for rent.
City councillor Marko Koprivec of the Social Democrats (SD) agreed the issue should be addressed at the national level.
"Leaving the housing policy to the market when people are being pushed into an utterly inconvenient situation should stop," he stressed.
The city council also endorsed the city's 2019-2022 housing programme, which shows the housing fund had 14 projects in various stages of development at the end of 2018.
The projects which have a detailed timeline are to provide 1,094 flats, while a total of 1,500 are to be built when all the planned projects are implemented.
The city council also backed the fund's changed budget for 2019, cutting revenue to 21.9 million euro due to lower borrowing and raising expenditure to 25.8 million.
STA, 25 March 2019 - Prices of residential properties in Slovenia rose by 18.2% last year, driven by a 19.8% growth in the prices of second-hand homes, according to a report by the Statistics Office.
The number of transactions decreased by 14% from the 2017 peak to 9,421 in 2018. The number of transactions in new apartments remained low for the second year running.
In the final quarter of 2018, prices of existing family houses increased the most, by as much as 38.6% compared to the same quarter a year ago.
Prices of existing apartments in areas outside Ljubljana were up by 12.6% year-on-year, while Ljubljana saw an 8% growth.
Prices of new family houses and new flats were also up year-on-year in the final quarter of 2018, by 5.2% and 3.3%, respectively, with prices of both types of new homes rising by 3.7%.
Despite the volatility in prices of new apartments, the prices increased by 23.9% since 2015.
The final quarter saw only 38 new flats sold, which is a record low. The number of new family houses sold remained low as well, but at 24, this was the highest figure last year.
Compared to the third quarter, prices of existing homes - flats and houses - rose by 6.9% with prices of flats up by 4.1% and prices of houses increasing by 11.9%.
As many as 1,757 transactions in existing homes were recorded in the final quarter of 2018, which compares to only 632 involving newly built homes.
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, 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