Archives for April 11th, 2007

The dragon just got evicted from the castle for failure to make rent.

I recently heard a story about a woman here in Maribor who tried to sell her house and buy an apartment in Ljubljana. After searching for a few weeks she gave up, realizing that she couldn’t afford to move there.

The horror stories from Ljubljana’s real estate market have been steadily increasing since I came here. And with property prices in Slovenia said to be increasing by 10% to 30% annually, I’m sure I’ll hear many more of them in the years to come.

I found this list of property prices in European cities (thanks pirano!) to be a bit shocking. Specifically, I’m surprised that Ljubljana is approaching the likes of Vienna and Berlin. And here it’s important to keep in mind that metropolitan Vienna is bigger than all of Slovenia combined. And it’s especially important to remember that Slovenian wages are about a third of those in Germany.

It’s a problem that’s not just haunting Ljubljana, but the whole country. As some researchers at Maribor University recently pointed out:

Slovenians are paid significantly less than Germans and Italians but are forced to pay only a little less for their goods and services… The convergence of Slovenian prices to those of Germany and Italy is much greater than the convergence of wages.

In other words, Slovenia’s got the worst of both worlds: Western European prices and Eastern European wages. I suppose it’s what the tourist board means when they talk about Slovenia being at “the crossroads of Europe.”

Also worth mentioning: Last year, Channel 4 picked Slovenia as one of the best places to invest in real estate. To be fair, there are indeed some great and generously priced places to be found here. But I wonder if any of them are left in Ljubljana.