May 2013 - Croatia market overview

Croatia property market is still in stall mate position. Asking property prices in April have been on average 0,2% lower than during March. Yearly decline in 2013 is almost 4,8%. Apartment prices in coastal areas on Adriatic have been around 1.600€/m2.

Highest asking prices in Croatia are always in the same areas, despite very low sales for years already. Dubrovnik with over 2.700€/m2 and Split with almost 2.4000€/m2. With average monthly salary of only 5.400HRK, which is about 720€, one can only ask himself how is it possible that anyone in the right mind would buy one of those apartments. Interestingly enough, not though that it would have any influence on property buying, is that the difference between man and women in salary terms is now only 6%.

POS Plus subsidized housing program

This, Croatia Ministry of Construction initiated housing project, should start within a month. After negotiating terms with banks, this model of financing the purchase of new unused flats with clean papers that are offered in the market will offer favorable conditions for buyers. Croatia will introduce the subsidized housing program called 'POS plus' for citizens to purchase new unused apartments on the market at favorable terms. Also, Croatia government will still continue with the usual 'POS' program.   Project should include 720 apartments for sale , including about 200 in just one suburb of Zagreb. Independent property analysts say that there are over 20.000 unsold apartments in Croatia available. If calculations of the Ministry are correct, the price of a square meter apartment in POS and POS plus programs will be 1,100€. For example, monthly installment for 30 years for an apartment of 60 square meters will be around 260 euro. In the end, complete savings on such apartment in Croatia, would be 10-15.000€.

Property tax news

Croatia Ministry of Finance completed a public debate on the taxation of real estate and waiting attitude and political decision of the government. In case of approval, this law will find its way to the parliamentary benches. In parallel with the changes in the law on real estate taxes, there are amendments to the existing real estate sales tax, which would bring some good news to foreign and domestic property buyers in Croatia. The main news is that the property tax would be reduced from the current five percent to three percent for all Croatia properties in the sales process. Still, one more news is, that possibly there will be no more exemptions for the purchase of the first real estate with which citizens resolve their housing problem. Official explanation of the Ministry of Finance is that there are no reasons to keep such option, because the number of people who use it decreased to about 10 thousand a year. Tax exemptions would be introduced only for agricultural land consolidation.

The Ninth Annual International Conference on the Croatian real estate market

In 2013, maybe the most important year since Croatia became independent state, our country is becoming a part of European Union. Conference was held at Hotel Esplanade in Zagreb 9th and 10 April. Traditionally, the conference had panels about all sectors of development projects and commercial real estate. Panel "Housing" this year brings a lot of interesting topics such as housing finance and housing prices to reflect market conditions. Experts in energy efficiency will speak about the impact of energy certificates in today's housing prices. This year one of the burning issues of today, the property tax, was also discussed into more detail. Due to the importance of this topic at this year's conference was present a separate panel "Taxes and real estate". This very interesting panel compared the real estate taxation in European countries and discussed about the positive and negative effects on property prices and transaction volumes.

The separate discussion forum "Tourism" was held for one of the most important industries in Croatia. Speakers talked about the impact of Croatian accession to the EU on tourism investment and investor relation and local and regional authorities in initiating tourism investment. Country Partner of Croatia in the Ninth Conference was the United Kingdom of Great Britain and Northern Ireland.

There were total of 630 speakers at this property conference. Over 150 panels were held over the course of several days. About 4.000 professionals attended the conference from over 30 different countries.