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No Major Change on Real-Estate Market in 2011

Ljubljana, 29 March (STA) - The Slovenian real-estate market saw no major change in 2011 compared to the year before, according to a report published by the Surveying and Mapping Authority (GURS) on Thursday. In real terms, housing prices and the number of transactions were down 3%.

The prices have not fallen considerably although GURS agrees with the European Commission that housing prices in Slovenia remain too high with respect to purchasing power.

After a major drop in 2009, the prices kept decreasing gradually, but not as rapidly as expected with respect to the crisis, GURS wrote.

In real terms, prices of existing flats decreased by 3.3%, prices of houses by 3%, of offices by 1.7%, of shops by 0.4% and of building plots by 4.5%, the latter mostly due to the deepening of the crisis in the construction sector.

The average price for an existing flat country-wide was EUR 1,730 per square metre, which is 2% less than in 2010.

In Ljubljana, the average price per square metre went up by 2% to EUR 2,500, while it fell in Maribor and Celje by 2% to EUR 1,200 and 1,250 respectively. In Kranj it remained at EUR 1,800 and fell by 1% in Koper to EUR 2,410 per square metre.

GURS sees the biggest reason for the modest fall in the primary market dictating the supply and demand on the secondary and rental market.

Major investors, mostly big construction companies, underestimated the crisis and refused to compete by offering lower prices, so most of them collapsed.

Banks, which secured their loans with mortgages on new flats, were not interested in lowering the prices, which is the reason why there has been no large-scale sale of new flats in the recent years.

Some 4,000 flats built in the 2009-2011 period remain unsold, which is a relatively large number since only 6,000 new flats were built in 2010, according to GURS.

The total number of flats sold in 2011 fell to under 7,000, while the number of houses sold increased slightly to some 3.600 houses.

Although sales of housing units were 35% higher than in 2009, when the real-estate market crisis was at its worse, the total number of units sold was still 37% lower than in the peak year 2007.

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