In a time marked by relentless inflation and near-zero interest rates on bank deposits, the prospect of investing in real estate continues to shine as a lucrative long-term option. With inflation currently hovering at 8.4% per year, mirroring the average price hike in Slovenia, the purchasing power of saved money is eroding rapidly. For instance, €50,000 holds less value today compared to a few years ago when the market was more stable. And the trajectory suggests that this trend will persist for the foreseeable future.
So, how can you safeguard your wealth from this loss of value? Is investing in property still a prudent decision in such challenging economic circumstances? The resounding answer is yes, and here’s why. Recent data from the Statistical Office of the Republic of Slovenia reveals that residential property prices in Slovenia are on an upward trajectory, with a quarterly increase of 1.6% and an annual surge of 8.8%. Typically, property prices tend to rise during periods of high inflation, promising potential for enhanced returns on investment.
Furthermore, you can capitalize on your property investment by renting it out. Given that rental rates have also climbed in response to inflation, this presents an added incentive to bolster the value of your savings.
However, not every property is equally suitable for long-term investment. To maximize your returns, it’s crucial to select properties that are poised to appreciate in value over time. Generally, newer properties in modern buildings or developments tend to maintain their worth. Consider properties where you buy at a fixed price, pay 10% of the cost upfront, and settle the remainder either two years later or upon completion. Location is another pivotal factor – properties near tourist destinations or in close proximity to city centers are more likely to shield your wealth against the erosive effects of inflation.
Nevertheless, prudent property investment necessitates thorough due diligence. Ensure that the property possesses all the requisite documentation, including building permits, occupancy permits, energy performance certificates, and proper registration in the land registry.
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“Je še vedno pravi čas za naložbo v nepremičnine?” (2023). Delo.si. Retrieved 14 September 2023 from https://www.delo.si/novice/slovenija/je-se-vedno-pravi-cas-za-nalozbo-v-nepremicnine/.