STA, 5 August 2021 - Property prices kept rising in Slovenia in the coronavirus year 2020 while transactions on the property market decreased. Transactions meanwhile rose in early 2021 to reach approximately the pre-pandemic 2019 levels in April, as prices keep rising, the Mapping and Surveying Authority (GURS) said on Thursday.
The number of housing transactions fell by 17% in 2020 compared to 2019 and business property transactions by 30%, shows the 2020 Slovenian property market report.
"The fall in housing transactions was almost exclusively a result of state-imposed restrictions to contain the epidemic, which limited normal property business for most of the year," GURS said in a statement.
GURS said the large drop in business property transactions revealed the uncertainty of businesses about economic consequences of the epidemic.
Transactions in agricultural land and forests dropped by 12%.
However, the epidemic did not affect demand for housing or building land, as supply of new housing on the market lags behind demand.
As a result, transactions in building land rose by 4%, as more and more people want to build their own family homes.
GURS said this trend is a result of flats in large cities getting more expensive, which drives people to build their homes outside large cities.
Since demand for property outstrips supply especially in urban and tourist areas, prices are growing.
"There is a lot of demand for housing despite high prices because of historically low interest rates and a lot of household savings."
GURS said that low interest rates encourage purchases of homes for own use and as investment.
Housing prices and prices of building land increased by 3-4% in 2020, practically around the entire country, while the growth would have probably been heftier in the absence of the epidemic.
Housing prices continued growing in the first quarter of 2021, also as a result of considerable growth in building material prices, a trend fuelled by a global rise in the prices of transport and materials due to the pandemic.
There are however considerable differences in property prices around the country.
The highest prices have been recorded in Ljubljana, municipalities in Gorenjska region (Kranjska Gora, Bled) or coastal tourism municipalities (Portorož, Piran), as well as in the broader area around Ljubljana (Lavrica, Škofljica, Brezovica, Grosuplje, Domžale, Trzin, Mengeš and Medvode) and in Kranj.
"In these areas the prices have increased the most in the past five years. The exception is the coastal area, where the still hefty growth was not among the heftiest, which means that housing prices in Kranjska Gora and Bled have recently exceeded the prices on the coast."
GURS recorded around 31,800 property transactions in 2020 in the total value of EUR 2.2 billion, down 13% and 21%, respectively, over 2019.
Both figures were lowest after 2015, when the Slovenian property market witnessed a turn in price growth.
Housing transactions accounted for almost EUR 1.5 billion, or two-thirds of the total value of transactions.
