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The Real Estate Market in Slovenia

08.09.2014 | Justin Young

1) Why Buy Slovenian Property?  A Recent Case Study

Torhouse Investments Limited plans to develop a credible investment strategy for the real estate market in Slovenia.

Torhouse Investments Limited is a leading company that supplies a comprehensive and structured business plan for corporate and private clients all over the world.

Torhouse Investments Limited is an investment group that since its early years has turned into a powerful and highly respected company with many satisfied clients and numerous successfully concluded business transactions. Torhouse Investments Limited's strategy focuses onn long and mid-term investment opportunities in chosen areas across Central and Southern Europe. For seven years this company has been helping clients to find the best place and conditions for their business providing them with needed support and all required services needed for a successful financial activity.

With its main offices in Cyprus the CEO of the company specified Slovenia as the next target for investment. This small alpine country has a beneficial business environment and relatively low tax rate making the start of any business easier than in many other European states. Moreover, the real estate sector if this country has remained in some way unexplored and not overcrowded by other investment groups and companies. After developing a correct business strategy Torhouse Investments Limited will be prepared for any unexpected situations in the market of this EU member.

2) Is Slovenia a Safe Place to Buy for Investment Property?

Slovenia joined the EU along with the other major Eastern European countries in May 2004.

Slovenia is probably the most secure of all of the countries even despite recent economic hardships that have affected most of Europe.  If you are an ultra-cautious investor who may lie awake at night, even if there is the smallest element of risk to your investment, then maybe, just maybe Slovenia is the right, long term country for you to be putting your hard earned money into.

If you do, you will for sure not be alone.  Slovenia was tipped by Channel 4’s ‘A Place in the Sun’ programme as the best place to invest over the next 10 years, with predicted increases of 250% over that period (slightly optimistic in our view!).  The Upmarket Knight Frank were also similarly bullish about Slovenia, putting it in their joint number two position with Latvia for 2007. Obviously since then the Crisis hit the Globe and Europe has taken its hard knocks including Slovenia.

However, before you get too carried way, there are some other factors to take into account.  It is hardly breaking news that Slovenia has got its act together despite economic hardships, and is a safe place to invest in, with the result that the capital, Ljubljana, is regularly a favourite amongst travellers that have visited numerous central European cities.  Although there are certainly going to be more price increases in the future, it’s hard to believe that it can continue such a pace over the long-term.  Remember how there was a lot of speculation in Warsaw, Prague and Budapest in the run-up to EU accession in 2004 followed by a plateau in the years following?  It’s possible that Slovenia’s entry into the Eurozone could, and the consequences of the Crisis have the same effect.

If you’re looking instead for a holiday home, Slovenia might be an option as it has some beautiful Adriatic coastline and fantastic Alpine country. Excellent infrastructure and a good quality of life even in these harder times.

The bottom line is that if you are looking for a solid safe investment and are planning on buying something with a long term eye, it will be possible to make some good money from buying real estate in Slovenia.

3) What is the Outlook for Slovenia Real Estate Prices?

According to the Slovenia Times Slovenia's consumer confidence index improved quite considerably in August, by four percent from July and by two percent year-on-year, mostly due to more optimism regarding key indicators for the coming 12 months, the Slovenian Statistics Office reported on Friday.

Contributing to this index there were more optimistic expectations from Slovenian consumers regarding the financial situation of personal households, the current economic situation in Slovenia and also unemployment in the coming twelve months.

Each of the three indices were up four percent points compared to July, while only the value of the indicator measuring the expected financial spending of on major purchases in the coming year was down.

Consumers were also more confident about their savings. The value of the relevant indicator in August increased by six percent points compared to July, by one per cent compared to last year's average and nine percent compared to August 2012.

4) Is the Economy Improving? The Affect on Property Prices

Slovenia’s 2nd recession since 2009 eased somwhat in the 2nd quarter as consumption fell less than in the first three-month period

Gross domestic product shrank 3.1% from the same period in 2012 after a 4.8 percent contraction in the 1st quarter, according to a estimate in a Bloomberg survey of 6 economists.

“The government’s ability to raise sufficient financing and its submission of the national reform program to the European Union is likely to have calmed nerves and eased the pace of contraction in private-sector investment,” Abbas Ameli Renani, an emerging-market economist at Royal RBS Group in London, said in correspondence today. “Net exports will most likely be the only positive contributor to the economy, as weak private consumption – albeit not as weak as before – will ensure imports continue to fall more than exports.”

Slovenia expects the economy to recover in 2015 as consumption is failing to pick up quickly and the country works on a banking situation that is undermining growth prospects.

The Prime Minister Alenka Bratusek has vowed to fix the banking sector with a direct capital injection of €1.2 billion, and by swapping the bad loans for government guaranteed bonds to aid the needed recovery.

The bank plan should “convince financial markets that Slovenia is a credible debtor and any new borrowing will be used for restructuring economy,” Jazbec said in a recent interview.

5) Slovenia - What are the  Best Areas  to Buy In ?

Slovenia's real estate prices achieved new and maybe final lows last year, and the Alpine republic may represent one of the most attractive – and least known – bargains for savvy, wise property investors. It is hardly surprising that Slovenia's marketing booths at the big real estate fairs are attracting increasing interest.

A good example was the country's presentation at the MIPIM real estate show at the French seaside resort of Cannes in March. MIPIM counts as the world's largest and probably most important meeting place for serious property investors as well as top projects on the market. This year's presentation organized by SPIRIT – Slovenian Public Agency for Entrepreneurship, Innovation, Development, Investment and Tourism – was entitled "Slovenian Way". The presentation showcased three differing projects, all situated along one of the main streets in Ljubljana's centre - Slovenska cesta.

"City Tower" is a €50m project comprising of a business centre at one of the capital's prime locations. The Šumi Building will contain prestigious, luxury flats in the centre of the capital and just a few meters away from the National Theatre. The project has an estimated worth of €63m. The third project was the long awaited new centre for the Slovenian National Library. The plans for the City Tower and Šumi Building were made by Boris Podrecca, the world famous Slovenian architect currently working in Vienna.

All three projects attracted a large amount of interest. Slovenia's presence was also successful this April at the largest real estate fair in Russia, the DomExpo. Opportunities were presented by six real estate companies all showcasing some of Slovenia's most interesting projects.

This high interest comes as no surprise. Slovenia offers unspoilt nature and an interesting geographical location on the European map. The country is located between the Alps and Mediterranean, and just a few hours drive from locations like Venice or Vienna. As in many European countries, real estate prices increased in the last decade, and declined after the crisis in 2008. According to analysts from local real estate agencies, prices have now reached the bottom and will gradually begin rising again over the next 2 years.

6) What is the Outlook for Rental Property?  Subtle attraction of Slovenia for a tourist.

The published Statistics show the steadily rising number of visitors – yet the potential of Slovenia’s tourism remains largely undiscovered by foreign investors and travellers alike.

Its funny to think but in 2012 the number of foreign tourists in Slovenia exceeded the country's own population. The 2.1 million visitors shows a 5.8% increase over 2011 and a 10% increase over 2008. The number of the foreign tourists has been growing since the country's independence in 1991.

This does not come as a surprise. Slovenia has so much to offer to its visitors and has for years, been a secret destination for the discerning traveller, the sunny Mediterranean, Alps, many thermal spas, good infrastructure and unspoilt nature, all packed in a handy small area close to major global attractions such as Venice, Vienna and Budapest, in addition,  wonderful nature such as the spectacular caves in the Karst region or the subtle classical charm of the nation's capital Ljubljana. Visitors often describe Ljubljana as like Prague in a smaller and much less crowded adaption.

The well visited Slovenian destination for tourists is Portorož and its picturesque neighbour Piran. However, the coastal area is not the main attraction - receiving 16% of the total tourists. The most popular destinations among foreign travellers are Slovenia’s mountains & lake areas, with over 27 percent of the visitors choosing to stay in one of the country’s Alpine resorts such as Bled, Bohinj, Kranjska Gora or Bovec. Around 20% pick the capital as their destination and around 15&, opt for one of Slovenia’s many thermal spas.

Surprisingly enough, despite its undisputed potential and continued year on year increase in tourism, foreign investors still have to really discover and take advantage of Slovenian tourism. The Terme Maribor spas and hotel network was recently bought by a group of Russian investors. The beautiful, renovated Palace Hotel in the seaside resort town of Portorož has been a part of the Kempinski Group for a while now. These two examples are among very few exceptions. But as a growing number of visitors discover Slovenia and its many charms, investors may well follow as there are some opportunities being greatly missed.

7) Are Property Prices Increasing?

House prices in Slovenia increased 0.8 per cent in the 2nd quarter of the year, according to the Statistics Office. New apartments and existing houses were more expensive, while the prices of newly built houses and existing apartments fell compared to the 1st quarter

There were 272 existing homes sold and they were 2.6% dearer than in the previous quarter.

The prices of new flats and houses were 1.2% higher on average than in the first quarter of the year.

In the April to June period, new houses were 7.2 percent cheaper than in the first quarter of the year and 14.5 percent cheaper year on year. Fifty new family homes were sold in the 2nd quarter, which is the highest number recorded since 2011.

Contrasting this new apartments were 3.6 percent more expensive compared to the first 3 months of this year and 2.9 percent more expensive than in the 2nd quarter of last year. The prices were  gradually decreasing through 2012.

168 new apartments were sold in the 2nd quarter, which is slightly above last year.

The prices of used houses and apartments were 0.6 percent higher than in the 1st quarter.

Existing apartments were 0.2% cheaper in the 2nd quarter. In Ljubljana, the prices fell for the 4th consecutive quarter, by 1.7%, while they were 0.7% higher elsewhere in the country.

More existing apartments were sold in the 2nd than in the 1st quarter, the number was however below last year's quarterly average.

10) Overall Consumer Confidence Continues to Improve in September 2013

Slovenia's consumer confidence index statistics continued to improve in September for the 3rd consecutive month, increasing by 2% over August and by

14% compared to last year, Slovenia's Statistics Office stated on Monday.

Consumer confidence increased mostly due to more optimism regarding the possibility to increase savings in the coming year, with the relevant indicator increasing by 4% on a monthly level.

The indicators measuring the actual financial situation in domestic households in the past year and increases of prices in the last year were meanwhile down.

The indicator "suitability of the moment for savings" increased by 6% in September compared to August, by 7% compared to last year's average and by 18% compared to last year.

8) What is the Best Way to Invest in Slovenia Real Estate?

The best way to invest in real estate in Slovenia is to contact a regulated agent such as ourselves who will help you find the property or properties which meet your aims and objectives - you can contact us without any cost or obligation for an informal discussion on your specific needs and requirements.

9) Want to View Properties Throughout Slovenia?

We dont just cover a specific area of the country our portfolio covers the whole fo the country and all types of properties including luxury appartments, houses,  cittages and farm houses. We also cover commercial real estate and have a wide selection of rental property.

10) How Easy is it to Buy a property In Slovenia?

The buying proccess is straightfroward and as you can read elsewhere on this site bith the seller and buyer are protected under Slovenia law. We can help guide you through the buying process and you can also take advatantage of our trusted partners from lawyers to builders - so we offer a one stop solution if you decide to buy property.

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