Slovenian real estate market flourishing
According to the latest report by the Mapping and Surveying Authority (GURS), the number of transactions involving real estate was record high last year at 36,000, which is 5% more than in 2016 and 16% more than in 2015.
The value of the transactions matched the 2007 record of some EUR 2.3bn, which is 31% more than in 2015 and 2.5% more than in 2016.
The most dynamic segment of the real estate market is the housing market. The number of deals involving apartments was up by almost a quarter and houses by 39% in the 2015-2017 period.
The biggest rise in the number of apartment sales between 2015 and 2017 was recorded in Novo Mesto, Krško and Brežice (around 40%), followed by Ljubljana's surrounding towns and Celje with a 35% growth, and Ljubljana and Maribor with some 20% growth.
The fewest sales contracts were signed in the coastal region and in Murska Sobota in the north-east.
Meanwhile, the most notable rise in the sales of houses was recorded in Ljubljana (35%), the coastal region without Koper (25%), Maribor (18%) and Ljubljana (15%).
The average price of a second-hand apartment stood at EUR 1,610 per square metre, which is 11% more than in 2015 and 6% more than in 2016. But it was still 12% lower compared to 2008, when prices peaked.
The costliest were apartments in the capital (at EUR 2,410 per square metre), followed by the coast without Koper (EUR 2,320) and Koper (EUR 2,110). The most affordable housing was available in Krško and Brežice (EUR 970) and Murska Sobota (EUR 940).
The prices of apartments went up the most in Ljubljana (by 18%), Koper (17%) and the Ljubljana surrounding areas (12%).
Between 2015 and 2017, the average prices of houses went up by some 9% to EUR 117,000 per square metre in Slovenia. In Ljubljana, house prices jumped by 19%, in Maribor by 18% and in the Ljubljana surrounding towns, the most dynamic area, by 9%.
Houses were the most expensive at the coast but the number of transactions there is far below that in the central Slovenia, where the prices were not much lower. Houses too were the most accessible in Krško and Brežice.
Based on the data by the Statistics Office, the central bank said in its June report that the Slovenian real estate market had been the third most dynamic in the eurozone last year, preceded only by Ireland and Portugal.
The prices of real estate in Slovenia grew twice as fast as in other erozone countries last year.
Banka Slovenije highlighted a 10% rise in the prices of housing units, which is the highest growth since the crisis.
Last year, the prices of houses and apartments were 10% lower than in the 2008 peak year and 14% higher than in 2014, when prices hit rock bottom.
Both the central bank and GURS expect the trend of moderate growth of real estate prices that has been recorded in recent years to continue because of slightly higher disposable income of households, the prices that are still some 10% lower than the pre-crisis peak, favourable loan conditions and growing demand.
Given the demand, not many new apartments are available not only in Ljubljana but around the country, so the construction of new apartment buildings has already started in the capital and is expected to intensify in the coming years.
Among the major planned investments in the capital is a 224-apartment building near the Celovški Dvori apartment complex and two 100-apartment buildings in the commercial zone of the Šiška borough.
Jewellery maker Zlatarna Celje has also started preparations for the construction of 200 new apartments in the Ježica borough.
The real estate markets in Slovenia's second biggest city, Maribor, and some other towns are also showing signs of revival with several major construction projects planned.
According to Banka Slovenije, the developments in the real estate market do not increase risks to the financial sector at the moment. The growth of housing loans is stable and moderate and slightly dropped at the end of 2017 and the start of 2018.
Banks are not as exposed to the construction sector as they were and lending standards are still higher than before the crisis. The bank system is also much more resilient to possible shocks and household debts are not too high, the central bank said.