Author Leaonne Hall is an expert on the overseas property market and has written extensively for a number of newsstand titles. She previously produced three editions of the Red Guide to Buying Property in Eastern Europe, and has been writing in detail on the individual markets since 2003.
Centrally located and breathtakingly beautiful, Slovenia has made itself a haven for foreign investors following the country’s accession to the EU, which resulted in an overhaul of the property legislation, making it easier for foreigners to buy here. Giving investors the luxury of choosing from purchasing a vineyard, ski chalet or chic city centre apartment, Slovenia has experienced some of the highest appreciation rates in Eastern Europe, making it an appealing option for those looking to invest their cash wisely.
Why buy in Slovenia?
Small but perfectly formed – that’s what most people buying in Slovenia think of this beautiful country. It’s one of Europe’s smallest countries, barely the size of Wales, and it has been much overlooked. Back in the 90s it was relatively unknown, with George W. Bush even famously confusing it with nearby Slovakia. Slovenia has benefited from its central position in Europe as this has helped to develop its blossoming tourist industry – the fastest-growing industry in the country for the last five years – which in turn has encouraged massive levels of foreign investment. Economically, Slovenia is a major success story, with GDP 95% that of Western Europe, while politically the country is stable and well developed, despite being caught up in the collapse of the former Yugoslavia.
Offering outstanding levels of natural beauty and described as ‘Europe in miniature’, Slovenia offers everything from a sweeping Adriatic coastline, vineyards, towering mountain peaks and lush, green grasslands. It’s paradise for lovers of the outdoors, who can choose from hiking, skiing, riding, cycling, climbing, water sports and golfing activities.
Since EU accession, previously antiquated and complex purchasing processes have been replaced by new legislation, making it easier for overseas buyers to invest here. Slovenia is within a short distance of Venice, Vienna, Budapest and Zagreb, and with budget flights offered by both Ryanair (they fly to Maribor airport) and easyJet (they fly to Ljubljana), the country is easy to get to. Given its size, Slovenia is easy to get around, too.
Prices may be more comparable to its European neighbours, but when compared with the UK, you certainly get more for your money. With low crime rates, friendly and welcoming Slovenes, a higher standard of living than Croatia and a lack of congestion – imagine no rush-hour gridlock! – Slovenia is hugely appealing.
Politics and economy
One of Europe’s leading economies and the first former Yugoslav country to join the EU and adopt the euro, Slovenia enjoys a firm economic footing. A high-income economy and a prosperous country, Slovenia has a GDP per capita of $23,250, the highest of the newly joined EU countries. Inflation fell in 2006, and Slovenia’s economy has started to develop more strongly in the last few years – 5.2% in 2006, with a forecast growth of 4.8% for 2007.
Privatisation has taken place in the banking, telecommunications, and public utility sectors and foreign direct investment is expected to increase over the next few years.
A parliamentary democracy was introduced in Slovenia in 1991, following the declaration of independence in the country, splitting it from Yugoslavia in a thankfully short-lived skirmish – interestingly, Slovenia was remarkably untouched by the Yugoslav conflict and remained a safe country to visit. The current President is Janez Drnovšek and the Prime Minister Janez Janša.
Geography and climate
The third most forested country in Europe and with one of the shortest coastlines – only 46.6km – Slovenia is bordered by Italy, Austria, Croatia and Hungary. It’s the meeting point for four geographic regions – the Alps, the Mediterranean, the Pannonian plains and the Dinaric Alps. Fewer than two million people live in Slovenia, with 270,000 of them in the capital, Ljubljana. The country boasts 5,593 square kilometres of grasslands, 363 square kilometres of orchards and 216 square kilometres of vineyards.
The diversity of the landscape is reflected in the climate, with the coast enjoying sub-mediterranean weather, the lowlands a warm continental climate, while the mountainous Alpine areas are characterised by snowfall. Finally, inland areas suffer from heavy rainfall, so don’t forget your umbrella!
History and culture
First inhabited in 4,000BC, Slovenia’s central location has made it a target for invaders and occupiers for many centuries. Absorbed by the Franks in 745, in later years Slovenia was ruled by the Hapsburgs, and then the Austro-Hungarian Empire.
At the end of WWI, and with the collapse of the Austro-Hungarian Empire, Slovenia formed a united kingdom with the Croats and Serbs, renamed the Kingdom of Yugoslavia in 1929. Declared the Socialist Federal Republic of Yugoslavia at the end of WWII, it wasn’t until 1991 that modern-day Slovenia was formed with a declaration of independence from the crumbling Yugoslavian state.
Overflowing with culture, there are more than 200 museums in Slovenia and a number of sacred sites and points of architectural interest. As many as one third of Slovenia’s cultural sites are of sacred interest, with antique early Christian basilicas, pre-Romanesque chapels and gothic, renaissance, baroque and neo-Romanesque churches.
Slovenia boasts one of the highest levels of biodiversity in the EU, with 11% of its territory protected land, and it has no fewer than 44 protected areas or parks, including one national park, three regional parks and 40 landscape parks. Slovenia is also home to a number of thermal springs and spas, with many visitors attracted to the country for activity or well-being holidays. There’s also plenty for lovers of ancient architecture as there are hundreds of examples in Slovenia, the best being Bled, Podsreda, Brezice, Ljublijana and Velenije.
The majority of Slovenes declare themselves to be Roman Catholic – 68% – although many do not faithfully practise it. There are also a number of Serbian Orthodox followers (2.3%), Islamic (1.2%) and Christians (0.9%). In total, there are roughly 30 different denominations practised in Slovenia.
Tourism and getting there
The Yugoslav conflict greatly damaged the Slovenian tourist industry, even though the country was free from conflict. Post independence, the most successful year for tourism was 2004 when 2,341,281 tourists visited the country; this was 4.2% more than in 2003 but still 17% less than in 1986.
Given that the country has a year-round tourist industry, with everything from skiing in the winter to hiking in the summer, not only does this mean there’s the potential for healthy rental yields, but it also guarantees sustainability in the property market. Tourism is also evenly spread throughout the country, not just focused on the capital, and importantly, Slovakia only receives 3.5% of its GDP from tourism, avoiding reliance on the industry. This is a good sign when it comes to preserving the country’s natural environment.
Adria Airways (www.adria.si), Ryanair (www.ryanair.com) and easyJet (www.easyjet.co.uk) fly directly into Slovenia from the UK, and you can also fly directly into nearby Zagreb in Croatia or Graz in Austria.
The cost of living
While you can expect the cost of living to be lower than that of the UK, Slovenia is not as cheap as some of its Eastern European counterparts. However, a UK pensioner would live comfortably here, even though there are fears that the euro adoption will bring prices level with those of neighbouring Italy. A three-course meal for one costs as little as £6.50, while a bottle of beer costs just 96p.
Food and drink
Slovenian culinary fare draws heavily on influences from neighbouring Hungarian, Austrian, Croatian and Italian cooking. Traditional meals vary depending on your location. In the mountainous areas, dishes are meat based and hearty, while along the coast, fish dominates the menu. Goulash is ubiquitous, while two traditional dishes are zlikrofi (ravioli filled with potato, onion and bacon) and zganci, a porridge often served with sauerkraut. Sour soups are readily found in the Gorenjska, Pohorje and Primorska regions.
As with many post-communist countries, you will find a mix of international cuisine available. Pizzerias are found in most high streets, while pasta dishes are on most restaurant menus.
Slovenia produces some fabulous wines. With 216 square kilometres of vineyards, Slovenes have been making wine for 2,500 years, with 80 million litres produced annually. Slovene wines are generally not as well known as wines from other parts of the world, but there are some very fine examples, especially from some of the larger vineyards. Slovenian wine is mostly red and particularly well known is the Teran variety, which goes well with smoked ham (prstut), smoked sausages and local cheeses. Another good tipple is the Dolina wine from Vipava.
Sustained by both local and foreign demand – 29% of which are British jet-to-let investors – the Slovenian property market has been performing well over the last two years. This is mainly thanks to the country’s economic and political stability, as well as the fact that since EU accession, purchasing property has been made easy. Prior to the entry of Slovenia into the EU, from 2001 to 2004, property prices rose between 35% and 60%, and over the past two years, prices have doubled in some places, such as the province of Gorenska, where it’s now hard to find a property for under €140,000. Figures state that the average price of a property in Slovenia is now €100,000, with real estate prices predicted to grow by 250% by 2015.
Demand is high, particularly around the picturesque Bohinj valley, while prices in the Kranjska Gora area have rocketed since Slovenia joined the EU in May 2004. Knight Frank have reported that Slovenia offers the best potential for further growth in its property market, and given that Slovenians are getting wealthier and there are increasing numbers of foreign executives relocating here for business purposes, the market is set to continue to experience demand and further growth. This is helped by the fact that Slovenia is a small country and there’s a lack of available property, making this a sustainable market.
Where to buy
There are three main wine-growing regions in Slovenia: the first is the area which extends northeast from Stajerska and Celje to Ljutomer and Prekmurje; secondly, there’s the area extending from Celje into Doljenska and Bela Krajina across to the Croatian border; and finally, there’s the area in Primorska around Goriska Brda, Nova Gorica and on to Karst. These regions offer many small vineyards which often come with management facilities, and many British investors are now purchasing as it’s only two hours’ flight from London. There are also tax breaks for agricultural tax and inheritance tax. Land in this area is highly affordable, with prices starting from as little as £4,064, rising to £10,000 for an up-and-coming vineyard.
The beating commercial heart of Slovenia, property prices here have risen by 32% in recent years, with prices doubling between 2004 and 2006. There has been increasingly strong demand for city centre property, which offers the best potential for jet-to-let investors, and this has recently spread out into the suburbs as property comes increasingly hard to find. Much sought after are apartments in the historic city centre.
This is not a cheap place to buy, with property costing between €2,000 and €3,500 per square metre. Prices in neighbouring Hungary, as well as in Poland, offer more for your money, but given that Ljubljana is attracting increasing numbers of executives, businesses and tourists, thanks to budget flights, prices are likely to continue rising now that Slovenia is part of the eurozone.
Jet-to-let investors tend to be focusing their attention on the more established and popular tourist resorts of the Primorska region, such as Koper, Izola and Piran. Prices on the Adriatic coast are similar to those of Ljubljana, with a two-bedroomed apartment in Koper costing €174,000, while a three-bedroomed house will cost around €280,000, and a four-bedroomed house €650,000. Prices here are currently 20% higher than those of Turkish coastal regions, but when you consider the stability of the Slovenian market, with the country already being an EU and eurozone member, and a regular destination for budget flights, as supply continues to dwindle and demand to rise, you are pretty much assured appreciation in the market.
The ski resorts in Slovenia are affordable, accessible and adaptable. Kranjska Gora, Bohinjska Bistrica, Bohinj and Bovec are hugely popular, all sitting within one hour of Ljubljana International airport, which receives numerous budget flights.
New apartments in Bohinjska Bistrica and Maribor are currently attracting many foreign families, and in the Maribor area there is a positive feeling of new growth, especially in the tourist industry. Ryanair have begun flights directly into Maribor airport from the UK, meaning the region is likely to see massive expansion. There are also a number of thermal spas around the Maribor region, which attract many visitors.
Since 2004, property prices have jumped from €1,500 a square metre to €3,350, with the average cost of a home €145,000. Away from Kranjska Gora, where prices have doubled and property costs €5,000 per square metre, ski property is still very affordable, priced at €70,000 for a one-bedroomed apartment of 60 square metres. For the best value, you should look at larger properties that command a lower price per square metre – for example, in Bohinjska Bistrica, a property comprising of four apartments is available for €395,000.
Ski property in Slovenia can be used during both the winter and summer seasons, and as the Slovenes are outdoor enthusiasts, a home here has the potential for year-round rentals.
What to buy
Those seeking to buy holiday homes are increasingly looking to stable EU countries such as Slovenia, especially as the markets of France and Spain get more saturated. The most popular with foreign buyers are the coastal resorts around Koplar and Piran, where you can find a bargain if you look inland at some of the older properties requiring renovation. However, investors should look to the newly-built developments.
It’s a similar story in the capital, where developers have already made inroads into the city centre. Historic properties that have been transformed into apartments are also popular. In the mountains, characterful ski lodges are in high demand for rentals, while there are also a number of small apartments on the slopes, as well as renovation projects.