Improved transparency of Real estate transactions in Slovenia

1. Improved transparency of Real estate transactions in Slovenia Marjan Čeh

2. Developing RE market – all types of transactions in Slovenia, Ljubljana 2005

3. Improved transparency of real estate market in Slovenia Establishment of common transparent computerized RE transactions database at Surveying and mapping authority of Republic of Slovenia • Act on real estate agency; (Ur. list 42/03 ZNPosr). • Directive - Real estate agencies transactions data management and distribution (Ur. list 93/04)

4. Internet version of RE transactions database

5. RE Transaction Types in SI • Sale; on free market • Sale; at public auction • Sale; among persons from all possible inheritance relation • Sale; due to expropriation • Exchange • Lease • Rent; market rental price (square meter/ month) • Rent; no market (nonprofit) netto rent price (per square meter, per month) • building right

6. Real estate object typesin RE DB • Land • Land with object • Object types: Building Part of building Engineering object

7. Contract price records in SI • Internal – agency transaction number (index of the job within the current year) • Date of contract, time spanof job (in days) from beginning of advertisement to contract date • Netto amount (free of taxes, provisions to agency, operating costs) • Calculated normalized price “per square meter”, from available price and area data. • The prices must be recorded separately (price of land, building, part of a building), if the contract indicates them separately.

8. Subject data:Seller/s and buyer/s • Nationality of each parity in contract • No name and address

9. Definition of prototype – criteriafromWG 3 Economy meeting in Ljubljana, SI • Prototype object: Parcel of vacant,urban land, • In the city size of national average (number of citizens in comparable town (settlement) is 25 000 - 50 000, • plot size 400- 2000 m2 • In zone planned for detached housing, • No infrastructure on the plot yet but, • it is possible to connect on the basic utilites (sewage, water, electircity, roads)

10. Prototype rights • Existing rights: • ownerhip right • building right • No obligations • no existing mortgages, servitudes, • no derived (future) mortgages, servitudes. • All legal aspects of the property are correct (no disputes) - the contract is complete relative to the reality

11. Prototype subjects • Buyer and seler • individuals, • both citizens of case state (not foreigner) • not companies • not in RE buissines • Selers aim: • Sell a Parcel of land in Urban area • Buyers aim: • Buy a Parcel of land in Urban area,

12. Prototype economic conditions • Assume retional behaivour of parities: thay will register the property in LR. • It is assumed that parities will not hire a valuer to determine the purchase price. • Payment method of the purchsase price: cash payment with optional depositon of money to the notary, • No credit (no mortgage) • Purchase price (market value) around 20 000 EURO • Profesionals (Real estate agency or Lawyer) are hired to provide all necessary services and information provision: (collect data about their services costs!)

13. Transactions analyses process in SI • DB atributes against prototype attributes • Definition of protoype criteria for sample selection • Selection of representatives according to prototype criteria in SI • Colect additional information about representatives (time of adverting, cost of agent, cost of notary, cost of surveyor, VAT, adminstrative fees) • Calculate costs for prototype entity – from representatives data • Compare costs of state representatives among participating countries.

14. Selection of representatives of prototype • Step 1: Select comparable cites (towns) • Step 2: Select parcels of urban land, • Step 3: Select parcels of vacant land • Step 4: Select plot size 400- 2000 m2 • Step 5: Select total price 19 000-21 000 Euro

15. Selection of representatives in comparable cities– tabele in SI population range 25 000 - 50 000

16. Selection of representatives in comparable cities - map Number of transactions of vacant urban land (plot size 400- 2000 m2)

17. Average area and average price/m2 of representatives in comparable cities

18. Sub class of selected representatives total price 19 000 - 21 000 Euro

19. Distribution of representatives of prototype Closest match, representative of prototype

20. Conclussion • Refine the prototipe criteria: • Set the radius from the capital city • Next steps: • Colect additional information about representatives (time of adverting, cost of agent, cost of notary, cost of surveyor , VAT, adminstrative fees) • Calculate costs for prototype entity – from representatives data • Compare costs of state representatives among participating countries.