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Last Updated: Jan 22, 2018




Slovenia's housing market has been on an upswing this year, amidst robust economic growth and rising demand for residential properties.

The nationwide price of dwellings rose by 8.34% (6.85% inflation-adjusted) during the year to Q2 2017, based on the figures from the Statistical Office of the Republic of Slovenia. On a quarterly basis, house prices were up by 4.26% (2.9% inflation-adjusted) in Q2 2017.
  • In Ljubljana, Slovenia’s capital, the house price index for existing flats increased by 12.83% (11.27% inflation-adjusted) during the year to Q2 2017. During the latest quarter, house prices rose 3.7% (2.35% inflation-adjusted) from the previous quarter.
  • In the rest of Slovenia, the prices of existing flats rose by 5.75% y-o-y (4.3% inflation-adjusted) in Q2 2017. During the latest quarter (Q2) the price index rose by 2.57% (1.24% inflation-adjusted).

While the number of dwelling transactions increased by 2.8% to 2,867 units in Q2 2017, this recent figure is a significant slowdown from Q2 2016's 24.29% y-o-y rise in the number of transactions, according to the Statistical Office of the Republic of Slovenia, due to a sharp decline in transactions of newly built dwellings, which plunged by around 60% y-o-y. In contrast, transactions of existing dwellings rose by 9.67%.

Lending for house purchases rose by 4.54% to €5.94 billion (US$ 7.01 billion) during the year to October 2017, according to the Bank of Slovenia, the country's central bank.

slovenia house pricesDue to a stock overhang, during the first ten months of 2017, the number of dwelling permits issued for residential buildings fell by 4.4% to 2,098 units, based on the figures from the Statistical Office of the Republic of Slovenia. The floor space of dwellings authorized also shrank by 4% to 536,369 square metres (sq. m.) during the same period.

Foreigners have been able to buy property since February 2003, on a reciprocal basis. Reciprocity is a principle verified by the Ministry of Justice (MoJ) on the basis of the Law on Reciprocity (Official Gazette No 9/99). Then following accession to the EU in 2004, EU citizens may now buy properties in Slovenia without restrictions.

Analysis of Slovenia Residential Property Market »


RENTAL YIELDS
Last Updated: Jul 28, 2017



How much will you earn?  Gross rental yields on apartments are moderate to good in Ljubljana, at around 4.5% to 5.1% in the city centre, and higher outside.  To define terms, the gross rental yield is the rent the landlord will earn - before taxation, vacancy costs, and other costs - compared to the purchase price of the property.

The gross rental yield in the Old Town is about 4.5%-5%.   For these areas we used the Global Property Guide's own research.  Outside, in the wider city and in Ljubljana surroundings, we used estimates from the real estate portal Nepremicnine.  Their figures suggest that gross rental yields on houses can reach 7.8% in the city, and 10.5% in the city's surroundings.  This is an excellent return.

How much do apartments cost? Apartments in the Old Town of Ljubljana cost on average, EUR 2,900 to EUR 3,200 per square metre (sq.m.). In the nearby areas apartments tend to be cheaper, selling for around EUR 2,300 per sq. m.  In the city's surroundings, EUR 1,450 per sq. m. is more usual for an apartment, EUR 1,000 for a house.

How easily will you rent your property?  Anecdotally, properties can be quite hard to let. Ljubljana is a small place.  The number of expatriates, embassies, and international companies is small, which again restricts the supply of tenants.

Round trip transaction costs are low in Slovenia.  See our Property transaction costs analysis in Slovenia and Round-trip property transaction costs in Slovenia, compared to the rest of Europe.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Jan 04, 2018



Rental Income: Nonresident foreigners earning rental income are generally taxed at 25%. A standard deduction of 10% of gross income is available for all taxpayers earning rental income to account for maintenance costs.

Capital Gains: Capital gains realized from the sale of properties are taxed varying rates, depending on how long the owner held the property prior to the sale.

Inheritance: Inheritance of spouses and direct descendants are not taxed in Slovenia. Other heirs are liable to inheritance tax and the applicable progressive rates vary depending on the relationship between the donor and the recipient, and the value of the property.

Residents: Residents are taxed on their worldwide income at progressive rates, from 16% to 50%.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Jan 05, 2018



Roundtrip transaction costs are around 4.434% to 8.26% of the property value. The 2% Transfer Tax is paid by the seller while the real estate agent’s fee at 4% (plus 20% VAT) is typically split between buyer and seller.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Sep 15, 2006



slovenia house for rentRent: Rent and rent increases can be freely negotiated but must be based on the market rate. In theory, rents must not be 50% higher than average rents in the same local municipality. In practice, this is not followed; landlords can draw contracts and change it as they wish.

Tenant Security: If the contract is for a definite period of time, the landlord has no obligation to renew the contract. If there has been no renewal 30 days before contract expiration, the tenant has to vacate the apartment at the day of expiration.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Jan 22, 2018


Slovenia's economic outlook remains positive in 2017 and 2018

slovenia GDP inflationSlovenia's economic growth continued in 2016, with its GDP rising by 3.1%, according to Statistical Office of the Republic of Slovenia. Last year's growth was attributed to more private and government consumption, posting annual increases of 4.2% and 2.5%, respectively. In contrast, gross investments fell by 0.1% y-o-y in 2016, after three years of growth.

The economy performed even better in the first three quarters of 2017. In the third quarter of 2017, Slovenia's GDP rose by 4.5% y-o-y, thanks to the faster increase in exports resulting in a record high external trade surplus of 11.6% of GDP.

After growth of 4.2% annually during the good years from 2000 to 2008, the economy contracted by 7.8% in 2009. The economy slightly recovered in 2010 and 2011, with GDP growth rates of 1.2% and 0.6%, respectively. However, in 2012 the economy shrank 2.7%, followed by another 1.1% economic contraction in 2013.

In the last three years, the economy grew by 3.1% in 2016, 2.3% in 2015, and 3% in 2014. Slovenia's economy is expected to expand by 3.5% in 2017 and by 3.1% in 2018, according to its central bank.

Slovenia's government managed to reduce its budget deficit to 1.9% of GDP in 2016 from 2.9% of GDP in the previous year. The budget deficit is expected to shrink further to 0.8% of GDP this year, and to zero in 2018. From 78.5% of GDP in 2016, gross public debt is also predicted to decline to 76.4% of GDP in 2017, and 74.1% of GDP in 2018, according to the European Commission.

Because of these better deficit and debt metrics:
  • Moody's upgraded Slovenia's credit rating in September 2017 from Baa3 to Baa1.
  • Standard & Poor’s upgraded the country's credit rating in June 2017 from A to A+.
  • Fitch upgraded the country’s credit rating in September 2016 from BBB+ to A.

Inflation was up by 1.2% in November 2017, an improvement from a 0.6% inflation rate recorded in the same period last year, according to the Statistical Office of the Republic of Slovenia.

Unemployment was 6.3% in the third quarter of 2017, down from 7.3% in Q3 2016, according to Statistical Office of the Republic of Slovenia.







  • Pro-landlord rental market
  • Low transaction costs
  • Strong post-transition economy
  • Low to moderate yields in Ljubljana
  • High rental income tax
  • Minor issues w/ ownership
RESIDENTIAL PROPERTY FACTS
Price (sq.m): €2,922 For a 120 sq. m. property, usually an apartment.
Rental Yield: 5.13% For a 120 sq. m. property, usually an apartment.
Rent/month: €1,499 For a 120 sq. m. property.
Income Tax: 22.50% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 6.35% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 10.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Landlord Rating is based on a detailed study of each country’s law and practice.




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