Slovenia Property Investment News

Bullish report on Slovenia set to boost property market

Slovenia’s Institute of Macroeconomic Analysis and Development has published its ‘Development Report 2007’. This report monitors the progress of Slovenia’s Development Strategy (SDS) that was adopted by the Slovenian government in June 2005. SDS sets out the vision and objectives of Slovenia’s development until 2013 with five development priorities outlined.

These objectives include the “economic development objective” – to exceed the average level of economic development in the EU in ten years; and the “social development objective” – to improve the quality of living of Slovenia’s inhabitants. Findings of both objectives are of pertinence to those considering an investment property in Slovenia. For instance, if Slovenia’s economy develops to bring it in line with other more established EU economies, a property investment in the country could hold less risk; and if the quality of living for Slovenians improves it could lead to higher wages, improved access to credit and an increased domestic demand for property.

The ‘Development Report 2007’ mostly compares Slovenia with other countries of the ‘EU-25’ (all member states apart from Bulgaria and Romania - as they have only been members since the beginning of 2007, some data is not yet available). The report summarises that over the last few years Slovenia has prospered economically and kept up the quality of life of Slovenians.

Detailed findings include the fact that between 2004 and 2006, Slovenia’s GDP growth accelerated and exceeded the average growth in the EU by much more than in the preceding three-year period; that Slovenia fulfilled the Maastricht criteria for euro adoption in 2006; and that trends in the labour market are also positive despite some structural problems that persist, such as long-term unemployment. The report finds that living conditions are gradually improving and the risk of poverty in Slovenia remains one of the lowest in the EU.

Of particular interest to the property investor is that while “dwellings stock is rising”, the “weaknesses that remain ongoing policy challenges include the low share of rented dwellings and insufficient access to housing for young people”. It seems that investors are already moving in to take advantage of such weaknesses, as official statistics from the Slovenian tax administration show that some 740 properties were bought in 2006 by overseas investors. This is a sizeable figure given Slovenia’s population is only around 2 million, but one that is set to grow significantly this year.