Housing: Who can afford to rent in the Slovenian capital?

“I take a leave every year to be able to move, which makes me completely exhausted because I’m moving instead of resting. And every move costs money plus you often have to pay an estate agent and double the rent. And then there’s also the security deposit,” a tenant who was moving again because her rented flat had been sold told us in the questionnaire.

Housing in Ljubljana is becoming increasingly expensive, as anyone who rents in the capital will agree. 

Moreover, renting is an unstable form of living: many tenants fear that their contract will be terminated, that the rent will increase, and they will no longer be able to pay it, or that the landlord will not renew the contract – these were the most common answers to our questionnaire on renting market housing so far. 

Pod Črto wanted to find out what tenants who are looking for a new rental home can choose from at all.

We begin our coverage of rental affordability by analysing rental listings for market housing, asking what tenants can choose from and at what prices. Our analysis starts in Ljubljana. We set the analysis period at just over three months, which we estimated to be the time a potential tenant would spend looking for a new place to move to. 

Our analysis therefore includes online advertisements published between 3 April and 21 July 2024. The listings analysed include both rental ads for apartments and rental ads for houses.

A potential tenant looking for a new place to rent during this period could therefore choose between a total of 1,595 ads for apartments with an average advertised rental price of 1,014 euros per month and 59 ads for houses with an average advertised rental price of 2,671 euros per month. 

Only three ads with a monthly rent of 300 euros 

Residential neighbourhoods in the Ljubljana Bežigrad administrative district. Photos: Metod Blejec

The lowest price for an apartment among all the listings analysed was 300 euros per month, while the highest was 4,500 euros per month. 

Only three of the published housing listings advertised a rent of 300 euros per month, namely for studios of 17, 15 and 12 square metres respectively. 

The highest advertised price of 4,500 euros per month also appeared in three listings, namely for apartments with four or more rooms and a surface area of between 183 and 262 square metres.

The lowest price advertised for a house was 590 euros per month. According to the seller, this house is located a 25-minute drive from the centre of Ljubljana. The next cheapest house advertised for rent was 800 euros per month, while the third cheapest advertised for rent was 1,000 euros per month.

The highest advertised price for a house was 6,000 euros. We included two ads in the analysis: the first advertised a house that the seller claimed was suitable for a diplomatic residence, and the second advertised a house that was supposedly adapted for medical use.

Among the ads published during the period covered by our analysis, most were for two-room apartments, followed by studio apartments and three-room apartments.

Methodological note: Two rental ads included in our analysis did not fit into any of the above categories and are therefore not included in the graph.

During the period analysed, the largest number of listings were published for properties located in the Ljubljana-Šiška administrative district, followed by the Bežigrad and Vič-Rudnik administrative districts.

Methodological note: Four ads did not contain information on the administrative district and are therefore not included in the infographic.

The analysis of the ads published during the selected period showed that for 1654 listings, the rental price ranged from 300 to 6,000 euros per month. Most of the ads, 248 in total, advertised a monthly rent of 700 euros per month.

The average advertised rental price per square metre was almost 18 euros per square metre for apartments and almost 14 euros per square metre for houses.

As can be seen from the density of listings, the largest price range was for houses and larger apartments.

Methodological note: The first published price by property type is shown for apartment and house types for which at least 20 listings were published.

Average advertised price for a studio apartment almost 600 euros, for a two-room apartment over a thousand euros

The average advertised price for a studio apartment was 593 euros per month, with a mean value of 600 euros. The average advertised price for a two-room apartment was 1,026 euros, with a mean value of 900 euros, and for a three-room apartment, the average was 1,363 euros per month, with a mean value of 1,250 euros per month.

Methodological note: Average prices are only shown for apartment and house types where we had at least 20 listings included in the analysis.

The average advertised price for a detached house was €2,673 per month and the average value was €2,500.

Real estate agencies: the advertised price usually corresponds to the realised price

Residential neighbourhoods in the Ljubljana Centre administrative district. Photos: Metod Blejec

The rental prices in our analysis are, of course, the advertised prices and not the prices actually realised at the time of the rental.

Of the 1,595 apartment listings covered, 915 were private offers and 680 were from real estate agencies.

For houses, there were 45 real estate agency listings and only 14 private listings.

We asked the real estate agencies with the most advertisements included in our analysis to what extent the results of our analysis of advertised prices differed from those realised. Two agencies replied.

Baza Agencija replied that in the period between 3 April and 21 July 2024, the advertised price was usually the same as the realised price, while at the beginning of this year they began to notice the advertised price usually being slightly higher than the realised price. 

Residential neighbourhood in Ljubljana Moste-Polje administrative district. Photos: Metod Blejec

They explained that the rental market is extremely dynamic, as the supply and demand ratio can change very quickly, which affects rental prices and the availability of properties.

Stoja Trade has a similar experience. The advertised prices are in fact the realised prices, the agency’s director Zoran Đukić told us. In their experience, there is very little difference between the two prices when it comes to renting. According to Đukić, our data on average prices per property and per square metre is close to the real market situation. 

Baza Agencija also confirmed that the actual prices for apartments during the period analysed ranged between EUR 18 and EUR 20 per square metre. They added the caveat that there is more variation in the case of houses. The difference between the gross and actual floor area of houses is much greater than that of apartments. In their experience, the price per square metre of renting a house within the ring road area is comparable to that of an apartment. 

Pod Črto adds that the analysis of advertised house prices is also less reliable due to the sample size, as it includes only 59 listings published between 3 April and 21 July 2024.

Estate agencies: Most demand for two- and three-room apartments, studio apartments and houses with rents up to 2,000 euros per month

Residential neighbourhoods in Ljubjana Šiška administrative district. Photos: Metod Blejec

As the infographic at the beginning of the article shows, most of the captured listings were for two-room flats and studio flats. We therefore wanted to know to what extent the supply in the listings matches the demand in the market.

Baza Agencija told us that in their experience, the highest demand is for apartments in interesting locations, such as Ljubljana Centre, Spodnja Šiška, Koseze, Trnovo and Bežigrad. Both smaller and larger apartments are in demand, ranging from studio to three-room apartments. In their experience, apartments in less attractive locations are available for longer. 

In Stoja Trade’s experience, the highest demand is for two- and three-room apartments, followed by smaller units, such as studio apartments, and larger apartments. In addition, renting smaller houses, even in the wider Ljubljana area, is highly desirable, with rents of up to 2,000 euros per month. 

In our sample, 19 out of 59 houses were priced up to and including 2,000 euros per month.

Residential neighbourhoods in the Ljubljana Vič-Rudnik administrative district. Photos: Metod Blejec

“We have noticed that prices have risen a lot in the last two years and that the increase in rental prices is mainly due to Airbnb short-term rentals,” Đukić replied. According to him, the owners compare their income with what they would get from short-term rentals to tourists. He added that the supply of rental housing was limited and that there was a particular shortage of newer apartments with lifts and garages. “There is a lot of supply of old apartments on the market,” Đukić explained.

As we wrote in our article on the affordability of newly constructed buildings, one of the problems with Ljubljana’s housing stock is its age. According to a 2018 study on housing in Ljubljana by the Institute for Studies of Housing and Space, the average apartment is almost 50 years old. 

With a rental budget of 300 euros you could choose between three apartments, with 400 euros you could choose between 35 apartments

The range of housing that tenants can actually choose from depends very much on the funds available for renting. 

Methodological note: The analysis only covers apartment types, excluding houses, with more than 20 listings.

An individual with 300 euros to spend could only choose between three apartments in the three months covered by our analysis. With 400 euros, the offer expands to 35 apartments. You would only be able to choose from more than 100 rental ads with a rent of 500 euros per month. This means that a person earning the minimum wage can hardly afford to rent an apartment on their own. 

The gross minimum wage for 2024 was 1,253.9 euros, which means a net wage of about 903 euros. According to the decision on minimum creditworthiness, which was adopted by the Bank of Slovenia in 2023 and is still in force, an individual without dependents must have 745 euros of their monthly income left after repaying a loan. 

The Bank of Slovenia’s decision takes into account the calculation of the minimum cost of living by the Institute for Economic Research as of November 2022, which amounts to 669.8 euros, adjusted by the Bank with the inflation forecast for 2023 and 2024.

If this limit were applied to rents, a minimum wage earner would have around 158 euros to spend on rent. For this amount, they could not rent any apartment in Ljubljana included in our analysis and published between 3 April and 21 July 2024. 

Two people earning two minimum wages with no dependents and wanting to share an apartment would only be able to choose from three housing listings in three months.

Original source: https://podcrto.si/nova-tema-o-stanovanjski-problematiki-najemna-stanovanja/