Foreigners are looking for small, older style properties like weekend houses or newly-built properties in Slovenia.

The Slovenian real-estate market is very attractive to foreign buyers as they can usually buy into this beautiful green country at a very reasonable cost. Since entering the EU, buying property in Slovenia has became a far more attractive proposition, as foreigners are now able to buy real estate under almost the same conditions as domestic buyers and the market has also opened up for foreign realtors. The local real-estate market is now regarded as one of most liberal in the new EU, as many other member states have been granted the right to close their doors to foreign buyers for periods ranging from five to seven years. However, legislation does exist to protect the local market from overzealous foreign buyers.

“Generally foreign buyers are looking for small, older style properties like weekenders or newly built properties with two bedrooms. Some are also looking for homes with some land; having a great view from the property is also important,” says Geraint George, the owner of the Slovenia Real Estate agency. Bled, Bohinj and the Gorenjska region in general are still highly popular, as these are areas that tourists regularly visit and explore and are extremely beautiful. Since Ryanair started to fly into Maribor, an area where prices are more reasonable and with good capital growth potential, there has been a notable increase in demand for properties in and around the town.

The British are coming
The most popular regions for foreign buyers are Prekmurje, northern Primorska and Gorenjska. Initially, the coastal areas were the most sought after but as there are very few properties available and prices are now almost as high as those in the capital most buyers seeking coastal retreats are now heading south to Croatia and Montenegro.

The British seem to have found their piece of heaven in the Prekmurje region, especially in and around Goričko, where they tend to buy old, rural homes that can be renovated without losing their rustic charm. The Austrians are also very interested in the Prekmurje region and, as they do in Hungary, they tend to buy established vineyards and wine cellars. Italian investors are more interested in the Primorska region, which, for many, is only a few minutes drive across the state border.

According to tax department records, foreigners purchased 740 properties last year; among these, 360 buyers came from Great Britain, Italians bought 185 properties and 59 properties were acquired by Austrians. However, buying a house in Slovenia is not always a simple process. Foreign buyers are first required to obtain a number of additional permits and, although this is usually handled by the real-estate agencies themselves, this can add months to the process.

What about a mortgage?
There are also other obstacles, including a less sophisticated mortgage system for foreign and even domestic buyers. The rates are quite high and the loan-to-value ratio is much lower than in the UK. “In the UK people get mortgages generally for at least 90% of the purchase cost of the property whilst UK buyers here are only being offered 50%, but we have managed to get an offer for 76.5% recently for one buyer,” George said. The lack of easily accessible high loan-to-value mortgages stops some people from buying.

Other difficulties include the difference in culture, language and expectation levels and generally the way of doing business is not the same. “We solve these difficulties by bringing the best of both cultures and expectations together and providing a service that buyers expect and understand,” says George.

Nevertheless, foreigners choose Slovenia mainly because it is a superb country for people who love outdoor activities; prices are reasonable and the locals generally open and friendly. From the UK, it is easily accessible by air and there are plenty of options in and just over the borders of Slovenia to fly in with low cost airlines. Geraint George: “There is a strong tradition in the UK of buying holiday homes abroad that the owners use themselves as well as rent out to other people. At the same time, they hope to get capital growth from the property. Getting capital growth in the UK property market is extremely difficult nowadays, as it is in some other parts of Europe, and Slovenia is seen as a fairly safe option as opposed to some of the less-developed countries that also recently joined the EU.”

Statistical information available on the real-estate internet portal, Slonep.net, indicates that over the last year the average price for a house in Pomurje rose 13.7%, whereas in northern and southern Primorska prices climbed 10.4% and 18.1% respectively. Undeveloped properties fared much better; with average prices in Pomurje and northern Primorska having increased by well over 100% and a comparatively modest 21.2% in southern Primorska.