Fears for Slovenia’s Property Market slump
New announcements from the European Commission reveal that worsening economic conditions are expected to hit Slovenia’s property market hard in the coming months.
The country’s GDP fell by 2.3% in 2012, with rising unemployment causing a slump in domestic consumption and a subsequent fall in overseas investment.
With the economy forecast to contract by another 2% this year, house prices are tumbling and the construction industry is effectively on hold.
Slovenia’s capital Ljubljana saw the average price of an apartment fall by 6.35% year-on-year in 2012. Countrywide, the drop was even steeper at 8.34%.
Based on figures from the Statistical Office of the Republic of Slovenia, 2012 was the worst year since 2009 for year-on-year falls, with the nationwide house price index dropping by 8.83%.
Considering that when it joined the European Union in 2004, Slovenia was seen as a shining example of how the eastern expansion of the EU would benefit from embracing countries in the area, the figures come as something of a surprise.
The country’s high standards of education and modern infrastructure led to it being regarded as the most promising of the 10 new European Union entrants at that time.
Today things are very different and the country’s two million inhabitants are struggling to deal with the downward slide into recession. The International Monetary Fund has stated that Slovenia will need to raise €3 billion to fund the budget in 2013.
When it comes to property investments, there is money to be made when a market has ‘bottomed out’ and prices have nowhere to go but up. The current situation in Slovenia is seemingly exacerbated by investors, who are waiting for things to get even worse before pouncing.
Foreign investments are complicated by currency exchange rates, as those quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.
It is worth comparing the market before making any decisions regarding how you will go about transferring money abroad.