Residential housing price indices, Slovenia, 4th quarter 2014
In the 4th quarter of 2014 the highest no. of transactions of existing dwellings in the last 7 years
In the 4th quarter of 2014 dwelling prices were on average 0.9% higher than in the 3rd quarter of 2014. The number of transactions of existing dwellings has already levelled to the pre-crisis level.
Prices of newly built dwellings slightly up
In comparison with the previous quarter, the prices of newly built dwellings increased by 2.6%, upon having reached the lowest level ever measured in the 3rd quarter.
Compared to the previous quarter, in the 4th quarter of 2014 the prices of newly built flats increased by 2.4%. With this increase the newly built flats continue their usual variation, which was in 2012, 2013 and 2014 often linked to the extremely low number of transactions. In the 4th quarter of 2014 things took a turn: the number of transactions (315) almost tripled over the previous quarter – in which the lowest number ever was registered, i.e. since 2007 when we started monitoring such transactions. Such a high number of transactions was last measured in 2010! The greatest contribution to the increase in the total number of transactions came from the number of transactions of newly built flats (172) built in Ljubljana by the Housing Fund of the Republic of Slovenia. The sale of the other half of the newly built flats on the same location is underway and shall reflect in the higher number of transactions in 2015. The share of newly built flats that are placed on the market due to bankruptcy is rather large. The largest such sales were made at Trebnje where 34 flats were sold and a number of such sales took place also in the other Slovenian regions.
In view of the number of transactions, the Osrednjeslovenska statistical region was more in the forefront than usually, as 69% of all newly built flats were sold in this region, of these 194 flats or 89% in Ljubljana; in Dolenjska 12% of the newly built flats were sold, in Podravska 8%, and the rest in the other statistical regions.
The prices of newly built family houses vary strongly; in the 4th quarter of 2014 they increased by 3.0% over the previous quarter. Even though the number of transactions was modest (54), it was the highest in the last 3 years.
Prices of existing dwellings unchanged, the number of transactions again higher
In the 4th quarter of 2014, the prices of existing dwellings in Slovenia remained on average unchanged when compared to those of the previous quarter, but the number of transactions increased by 14%. The number of transactions (1,833) was the highest in the last 7 years and has already levelled to the pre-crisis level.
Despite the increased number of transactions, the prices of exiting flats in Ljubljana increased by only 0.1%. Compared to the previous quarter, the prices of existing flats outside Ljubljana, i.e. in the rest of Slovenia, remained unchanged in the 4th quarter of 2014. Following 3 years of gradual decline, the prices of existing flats somehow settled in the second half of 2014, namely in Ljubljana at the price level of the 2nd half of 2005, and outside Ljubljana at the price level of the end of 2006. These lower prices of existing flats on the one hand and excess supply of newly built flats at reduced prices on the other hand stimulated lively trading. The real estate market of existing flats in Slovenia thus livened up. The market of newly built flats follows in the same steps, yet the outcome of this process remains uncertain.
In the 4th quarter of 2014, the prices of existing family houses increased by 0.8% over the previous quarter, while in the previous quarter they decreased by a similar percent. The process of slow, yet persistent decrease in the value of existing family houses may be thus settling down, as the price decrease keeps lowering from quarter to quarter.
In the 2nd half of 2014, the prices of existing family houses remained at about the price level that applied at the end 2006. Therefore, the more lively market is not a surprise. In the 4th quarter of 2014, the number of transactions of existing family houses (456) was again higher than in the previous quarter and has already levelled to the pre-crisis level – and was the highest in the last 7 years.
Annual movement of dwelling prices
Compared to 2013, in 2014 dwelling prices decreased by 4.4%. This was the third consecutive annual decrease in dwelling prices; in 2013 they decreased by 4.4% and in 2012 by 8.8%. The last year in which dwelling prices increased was 2011 (by 1.4%).
In 2014 the prices of all kinds of dwellings decreased, while the highest drop in the value was recorded in existing flats, namely by 5.7%. Their prices decreased in Ljubljana (by 3.1%) and also outside Ljubljana (by 7.2%). Existing family houses lost 3.2% of their value, and newly built ones 4.6% of their value. The smallest, only 2.8%, was the decrease in the value of newly built flats.
In 2014, the prices of dwellings in Slovenia (flats and family houses) were on average similar to those in 2006.
Chart 1: Quarterly growth rates of dwelling prices, Slovenia
Table 1: House price indices and number of transactions by type of dwellings, Slovenia, 4th quarter 2014