The average price per square meter of a new apartment in Zagreb returned to the levels from 2008 and the first half of 2009 and for the first time exceeded the amount of HRK 14,000. More precisely, a square meter of an apartment in the first part of 2020 was sold at an average of HRK 14,288! This is approximately one thousand kunas more expensive than Zagreb's new squares were sold in the same period in 2019, and more than 4 thousand kunas more expensive than in 2016. That year, the average price fell below 10 thousand kuna
Subsidies raise prices In a year, new apartments in Zagreb have risen in price by as much as 15 percent, unlike the rest of Croatia, which includes the Adriatic, where prices have fallen by about 4 percent annually to an average of 11,263 kuna per square meter. True, such prices ‘in the rest’ of Croatia were also last seen in 2008, but the Central Bureau of Statistics did not specify the prices on the Adriatic and by the sea, and the prices in the increasingly desolate continental part of the country. The representative of the real estate business, Dubravko Ranilović, believes that there has been no drop in prices in Split and other cities by the sea. According to Ranilović, Zagreb is also in demand because the purchase of real estate is still seen as a good investment, especially because the interest rates on savings are negligible. The big jump in the prices of new apartments in Zagreb was significantly influenced by the state program of subsidizing interest rates, because most subsidy beneficiaries live and work in the capital. Maruška Vizak, an expert at the Zagreb Institute of Economics for Real Estate, says that the earthquake, even the quarantine, has not yet spilled over into prices in the first part of the year, and they are a reflection of previous events. - The real estate market is inert and shallow, which means that current events are slowly spilling over to it. The quake and quarantine may be felt on prices in the second half of this year. The real estate market with prices knows how to react with a three or four year delay to an event - says Vizek.
So far, it is only known that real estate sales have stalled for some time or have been significantly reduced, but after the initial shock due to both the earthquake and the epidemic, things are slowly returning to normal. Of course, this time as well, at the instigation of the state, which has embarked on this year's second tender for subsidizing interest rates on loans, and it is expected that, similarly to spring, more than three thousand citizens will ask for subsidies. Some banks have lowered interest rates in the current tender to an unimaginable about two percent, which means that it is in the interest of banks to direct as much capital as possible in that direction. - Already in 2019, there was stagnation or small changes in prices in settlements outside Zagreb and the coast, and the number of transactions was falling. Such a movement is usually a sign that the market is overheated and that a drop in prices can be expected - says Vizek. - I don't have a glass ball so I can say how many - adds Vizek.
People from the field say that the current market signals from Zagreb are twofold, there is a growing interest in new construction on the outskirts, but also in quality undamaged residential buildings in the city center. - Zagreb was and remains attractive for such investments. With the earthquake, the demand for new apartments only further crystallized. I keep saying that this crisis is not as structural as it was in 2008. There is capital and it is logical that part of that savings will end up in real estate - comments Dubravko Ranilović, president of the chamber real estate association. Bad for offices Sales, he says, are mostly down, but that applies more to older properties. The owners of office space are also in a sensitive situation. Demand for offices has been significantly reduced due to working from home. In Croatia, about 26,000 flats or apartments and about 14,000 houses were sold last year. Most of the real estate sold was located in large city centers or on the coast, which also had an impact on prices. Foreigners have largely disappeared from the market this year due to movement restrictions. By the way, real estate transactions are taxed at 3 percent, HDZ mentioned in its election program that it will abolish that tax, but Minister of Finance Zdravko Marić says that next year everything will go the same way.