STA, 17 November 2021 - The prices of apartments and houses have been rising rapidly since the real estate market started recovering in March. In the first half of the year, they rose by around 8% year on year, the highest six-month growth since the 2008 real estate crisis, according to the Surveying and Mapping Authority (GURS).
The prices were pushed to a record high level in the first half of 2021 by the record high rise in prices of apartments in multi-apartment buildings in major towns, except Ljubljana.
In Koper, Kranj, Celje and Maribor the prices jumped by 10-12%, GURS says in today's report on the real estate market in the January-June 2021.
The median price for used flats in multi-storey buildings at national level reached EUR 1,980 per square metre.
After exceeding EUR 3,000 per square metre for the first time ever in the second half of 2020, the median price for Ljubljana apartments stood at EUR 3,250 per square metre in the first half of this year. The record growth in the capital was achieved in 2018, when the prices surged by 15% year on year.
At the coast, the median price of used apartments was EUR 2,700 per square metre, in Kranj EUR 2,520, in the northern and southern Ljubljana area EUR 2,500, in Celje EUR 1,600 and in Maribor EUR 1,550.
"The high growth in housing prices is on the one hand driven by strong demand, encouraged by low interest rates and the availability of money, and on the other hand by limited supply of new-build properties," GURS said, adding that low interest rates encouraged both purchases of properties for own use and as investment.
The prices are being inflated also by the rising prices of building land, and indirectly construction costs as a result of globally rising prices of transport and construction material due to the pandemic.
The high prices of apartments are also driving an increase in demand for construction land, and a construction expansion. "This is the most evident in Ljubljana, where the current and planned construction of new housing buildings can already be compared to the pre-crisis period before 2008," GURS said.
GURS expects housing prices to continue to rise until the supply exceeds the demand. At the moment most new apartments in major towns and tourist areas are sold before they are built despite the record-high prices.
In the first half of 2021, transactions in flats and building land were level with the second half of last year, at 8,350, which is almost 30% higher than in the first half of 2020, which was marked by the Covid-19 pandemic. Compared to the first half of 2019, they were down by 5%, GURS said.
Since the start of 2019, the transactions were up the most in the second half of 2020, by almost 30% compared to the first half of 2020.
At the start of 2021, transactions were first down somewhat, reaching a second bottom since the start of the epidemic in February (the first being recorded in April 2020). Real estate started selling again after the third wave of the epidemic in March. At the end of the first six months, translations already exceeded pre-epidemic figures.