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Govt Mulling Intervention on Housing Market

Ljubljana, 16 April (STA) - The government is considering leveraging the Housing Fund to mop up the overhang of unsold apartments on the market, Infrastructure and Spatial Planning Minister Zvonko Černač told Monday's edition of Delo.

The state-owned Housing Fund is looking into ways of either buying unsold homes below market value, leasing with deferred purchase or leasing in the traditional way, according to Černač.

"If the project succeeds, the Housing Fund would become a financial and property institution that would provide long-term incentives for leasing," he said.

Černač says the Housing Fund has enough capital, EUR 400-500m, to buy or lease about 3,000 apartments.

But he says the project hinges on the overall financial situation in the country: if the supplementary budget makes state borrowing cheaper, implementation will become much more realistic.

Slovenia's housing market has been in decline since 2008, with thousands of apartments remaining unsold despite falling prices.

Prices of housing fell by 2.4% in the third quarter of 2011 on the quarter before, with prices of new flats slumping by 5.2% after three consecutive quarters of growth, official statistics show.

Only 180 new flats were sold in the third quarter, compared to an average of 320 per quarter in 2010, according to transactions reported by real estate companies.