Portorož - The property market was in the focus of a discussion at the 39th Financial Conference in Portorož on Wednesday. Črtomir Remec from Slovenia's Housing Fund said the property bubble was already full-blown yet no-one knew when it would burst. Matej Sodin from Reintenburg meanwhile does not expect the trend of rising prices to change much.

Prices have been rising rapidly in recent years in Slovenia, fuelled by high demand and a shortage of flats alongside low interest rates and the availability of loans.

Remec said most buyers bought homes as an investment but those who actually needed them could not afford them, adding the Housing Fund would soon build 2,000 new non-profit flats.

Sodin, executive director at Reintenburg, sees incentives to property purchases in the fact that legislation has been simplified in recent years, the population's net income has increased and the rental tax has been reduced.

He also believes that it is in the interest of Slovenians to have high property prices, as 80% of citizens are also homeowners. For this reason, it is not in the interest of any Slovenian government to set a high property tax, all of which will lead to market growth, he said.

Matej Rigelnik, a partner at Equinox, believes that due to the expansionary policy of central banks and the resulting large amounts of money, there are more bubbles around than just the real estate one. He also believes that once interest rates rise, there will be better alternatives to investing in real estate.

While Remec expects the growth of property prices to slow down as interest rates grow, Sodin said there was a strong indication the upward trend will not change significantly.

Sodin meanwhile said that the company had seen "unique growth" over the last three years - from selling two flats a month at the start, to selling four to six now, and at significantly higher prices. Currently, they have sold around 45% of all housing units.