New Kid on the Luxury Block
It might not be a conventional choice but, according to real estate agent Eva Jakopin, Slovenia has many attractions for those shopping at the high end of the property market. "Slovenia is a country with a variety of landscapes," explains Jakopin, who works at Elite Property Slovenia, an agency specialising in luxury property in the Central European country. "It's possible to have a property on the coast and yet be in the mountains skiing two hours later. And its location in the heart of Europe means it is close to other attractive destinations such as Italy, Croatia, Austria and Hungary."
It's this diversity and location which means many different types of buyers find their requirements met by Slovenia, says Jakopin. North and South Primorska are favourites for rural retreat hunters, she explains; Bohinj and Bled adored by those looking for mountains and lakes; the coast an obvious choice for water lovers; and Ljubljana and its surroundings ideal for those who prefer to be in a city.
Slovenia's glorious landscape may be a consistent factor for real estate hunters, but thanks to the worldwide economic downturn little else has been in recent years. The luxury sector has not been immune to the ravages of the recession, and according to Jakopin it means that sales have considerably slowed.
"We are finding that the traditional markets remain the same, although reduced in size," she explains. "As an agency specialising in attracting foreign investors, we find interest is mainly from Italian, Russian and British buyers in the luxury end of the market. Our Slovenian part of the business has seen a sharp decline on Slovenians looking for luxury property - rather we have seen a lot more people trying to sell due to financial difficulties over the past few years."
Combine this increase with the completion of developments started pre-recession and there are lots of options for those seeking high end property in Slovenia. In Jakopin's words: "we have no shortage of luxury property - supply is not a problem."
One recently completed luxury development is Zeleni Park 2, near Koper. The second phase of this coastal development - which contains both residential and commercial properties - has drawn interest from potential buyers both inside and outside Slovenia. But company owner Uroš Brataševec says there are currently no plans for further developments on the same scale. "I think that [at the moment] we can make five to ten luxury apartments at a time. Not more."
His caution is understandable. The downturn has reduced the number those looking to buy property, even in the luxury sector, and has meant that many prestige developments across Europe have stood empty. Some construction companies have consequently been forced to put planned future developments on hold.
Glorious landscapes and a practical location haven't been enough to satisfy those looking to buy during the downturn. There has also been the expectation of getting significant bang of the buck. According to real estate agents, Slovenia offers just that.
"There is no stamp duty when you buy in Slovenia," Jakopin points out. "This represents a significant saving for those buying high end property. In the United Kingdom, for example, stamp duty amounts to tens of thousands of Euros on a luxury property."
Recovery in London
UK taxes may be higher than Slovenia's, but at the moment so too is demand for luxury properties. According to Liam Bailey, head of residential research at global property consultancy Knight Frank, there is now a "dramatic shortage of supply" of high end properties in London, with 22 percent fewer properties available for sale in March 2010 than is normal for the time of year.
"The market recovery in London was kick-started in March last year by low interest rates and the weak pound which drew foreign buyers to the capital," comments Bailey. "There was a definite feeling that price falls in the year to March 2009, at 24 percent, had created good value in London and buyers began to bid prices higher."
The story in other established European luxury property markets may not be quite as dramatic, but the general theme is the same. Bailey's colleague Rupert Fawcett reports that the Italian market has remained "relatively robust" in the past year, with an increase in interest from Italian and European mainland buyers. Sterling and dollar buyers are, he says, more cautious due to the swing in exchange rates. In the Cote d'Azur, Knight Frank reports 20 to 30 percent higher activity in the second half of the year from Dutch, Norwegian, Belgian, Danish and Russian purchasers - all assisted by low interest rates and lower capital values.
Signs of progress
For the Balkans, however, the early recovery stage in which Slovenia finds itself is a common one. Croatia, Serbia and Montenegro are all in a similar position. And while their beauty may match that of Slovenia, the ease with which foreign investors can buy property doesn't - an important factor given that foreigners are currently the most active on the luxury property market.
There is hope that the story of Slovenia's luxury real estate market is about to become closer to that of France and Italy than of its Balkan cohorts. In the experience of Eva Jakopin, when the price is right property can and will sell.
"Well priced property will sell and sometimes sell very quickly," says Jakopin. "But in many cases prices have not yet been reduced enough to entice investors back to the market. Pricing is still an issue for many of our investors."
If that changes - as many believe it is about to - there is no doubt that many more buyers hunting for higher-end properties will soon be discovering the delights of Slovenia.