Real estate prices in Ljubljana are one of the highest in Europe, but if we consider population purchasing power, we can see that this picture is even worse between european capitals only Lisbon, Riga and Warsaw are slightly more expensive.

Real estate agents are warning us that it is difficult to compare not only prices in one city, block of flats or in one building, but also between different countries, because they are effected by number of factors. Inspite that we gathered information from 12 european capital cities and made a few calculations about real estate prices. To have more comparable data, we asked the real estate agencies for information about avarage prices of 55 to 60 square meters large and approximately 20 years old apartment in their capital city, located in an avarage neighbourhood with a good public transportation connection, 15 minutes from the city centre. We would also like to stress out that city centre of Ljubljana is something totally different than city centre of 525,2 square kilometers big Budapest (two million inhabitants) or Rome (150 square kilometers and 3,8 million inhabitants). All calculations, presumptions and conclusions are made on the basis of this data and are namely infomative.

Warsaw is the most expensive capital city

As you can see in the table, the prices of a square meter of a requested apartment are about the same as in Nicosia, the capital of Cyprus, slightly higher in Bruxelles, 500 or 600 Euros for a square meter are lower prices in otherwise incomparably higher standard Rome and Berlin and almost half less costs a square meter in Budapest or Riga.

But prices don't tell us much, because purchasing powers between these capitals are different. It's almost imposible to get comparable data on avarage income of the citizens in 12 european capital cities, nor data on the country level, that's why we used gross domestic product (GDP) per capita with consideration of parity purchasing power (PPP) which we got from the Statistical Office of the European Commission Eurostat for 2005. Slovenija enters 7th place with 18.700 , from the new EU member countries only Cyprus reaches higher place, The Czech Republic follows us with 17.100 . Our GDP with consideration of PPP is higher than GDP of some of the old EU country members like Portugal (16.700 GDP per capita), but lower than for instance GDP of Greece (19.200 GDP per capita) and Spain (23.100 GDP per capita), but we failed to get information on apartment prices for Spain. Calculation of corelation between GDP and apartment prices per square meter showed that we can find the highest prices in Warsaw, where it's citizens could afford only nine square meters per year with their GDP (with consideration of PPP), slightly more in Riga and Ljubljana (9,2 square meters), Lisbon (9,3) and Nicosia (9,8). In avarage we can find the cheapest apartments in Berlin (18,4), Rome (16,1) and Vienna (15,9), which is almost a 100% cheaper compared to our prices.

Comparison with Ljubljana

If we compare prices, which we got from the real estate agencies from abroad, with Ljubljana prices and we consider their standard, we learn that people in foreign countries can afford an apartment easier than people of Slovenija. Citizens of Ljubljana are buying apartments at 96 percent higher prices than citizens of Berlin, citizens of Rome are buying at 72 percent lower prices and citizens of Vienna at 71 percent lower prices. Prices in Budapest an Prag are, compared to Ljubljana and with consideration of their countries standard, one third lower. We can find almost the same difficulties as in Ljubljana (when buying apartments) with the citizens of Nicosia, Lisbon, Warsaw and Riga. From this we can conclude, that the inhabitants in wealthier country members of EU are able to afford an apartment easier than inhabitants in some new or less developed country members. This was certainly effected by the (bad) regulated market, (in)sufficient supply and the possibility of getting a housing credit. In some country members the entrance in EU was the cause for higher prices. Like in Slovenija, more and more foreigners after May 2004 started to get interest in real estate in Poland, explained the representative of Warsaw real estate agency Maxon, which is (with insufficient offer) one of the most important reasons that apartment prices rose for 70 to 100 percent in the last two years. You will need to pay about 2000 for a square meter of an 55 square meters large new or a older apartments in the centre of Warsaw. Slightly lower prices are in the periphery, about 1500 for a square meter of a new apartment. Rents are also high: rent for a two-room apartment in the centre is about 550 per month, and in the periphery about 350 per month.

The entrance in EU also had a great effect on the real estate prices in Nicosia. They informed us from Costas Markides real estate agency that two years ago a price of a bit older apartment in the periphery was 72.700 , now it's 112.500, and in the city centre it is almost impossible to get a two-room apartment for less than 147.100.

Riga has also risen their real estate prices in the same period for almost 100 percent, says a representative of Nirafonds real estate agency and they are still expecting an annual growth of 5 to 10 percent. Citizens of Latvia capital city like to buy real estates and that is because of a simple reason almost every family can afford a mortgage on their real estate.

A correspondent of Delo in Budapest informed us, that ther is a lot of offers of real estate in the capital currently there is about 35.000 old and 5.000 new apartments on the market, and salesmen hardly get more than 89.300 for them. An avarage price of a square meter in the city centre is around 1070 to 2860 and in periphery around 1150 to 1250 . Retail prices for a lower quality housing that was build in communism are around 600 to 820 for a square meter. Ther is also a difference in prices between the two sides of Danube real estate prices on the left side (Pest) are lower than on the right side (Budim).

Source: Delo FT, Milka Bizovicar