The real estate market in Croatia has slowed down this winter compared to last year, and the total real estate turnover has fallen. However, the asking prices remained the same, in some places even higher than last year. But the realizations show a slightly different picture.
- Catastrophic estimates of a possible drastic drop in real estate prices have not come true. Real estate continued to retain safe investment status in turbulent times. Of course, the pandemic had some impact on the Croatian market, and the earthquake on the Zagreb market - said Dubravko Ranilović, president of the Real Estate Association at the Croatian Chamber of Commerce and director of the Kastel nekretnine agency.
Due to the slowdown in the economy and the decline in purchasing power, he added, the real estate market is also slowly but surely slowing down. The number of transactions is significantly lower compared to the same period last year.
- Although the requested prices are still a few percentage points higher than in 2019, the prices in realization are still adjusted to lower values. Except for the prices of new construction, especially in Zagreb, the average realized prices of used real estate are usually slightly lower than last year. And how much lower, depends on the location, so the decline is not uniform throughout Croatia - comments Ranilović and concludes that despite the unpredictable weather, there are no major shocks in the real estate market and that everything is moving in the expected sphere.
Despite a sharp drop during the spring, real estate sales rose in the summer and had almost returned to last year’s figures.
- Buyers have reduced the activity of buying real estate, they are thinking much more, it is harder to decide to take out a loan whose terms have been tightened by banks anyway and thus made it more difficult to access.
It would be expected that in such a situation, the decline in demand for real estate was accompanied by a fall in prices, however, there was no significant drop in prices. The reason for this is a combination of low and limited supply of some real estate, historically low interest rates on mortgage loans, but also still current subsidized loans that keep prices stable - said Jasna Biliskov Barun, director of Biliskov Real Estate in Zagreb.
At the same time, owners who, for one reason or another, have recently been forced to sell some real estate have lowered the price, by about 15-30 percent of the demand, but such are rare. Most of the clients of that real estate agency in the center of Zagreb withdrew from sale until further notice.
FIGHT FOR TOURISTS
- In Dalmatia, the summer was mostly marked by a struggle for every tourist, and as far as the sale of real estate is concerned, they were significantly less than in previous years. Mostly, some domestic buyers who solve the housing issue, mostly on the outskirts of Split - in Kastela, Solin, Podstrana, Omis… where the prices per square meter are significantly cheaper than in the city itself. There were almost no foreign buyers this year - explains J. Biliškov Barun.
The health crisis, adds Biliškov, has a great impact on the entire tourism sector in the world, so it will affect the real estate market used for tourism in Croatia. When, how and to what extent, it is difficult to predict depends on how long all this will take.
- Total economic uncertainty and the difficult possibility of buying other real estate also keep real estate owners or sellers passive. Despite some recent economic improvements, continued unemployment and economic uncertainty could continue to affect the housing market in 2021. However, there are also some signs of a return to normal. Although the conditions have been tightened, mortgage loans at favorable interest rates are still available, and APN subsidies have been announced in the new year as well - concludes Biliskov Barun.
Despite the pandemic, new construction prices are rising
The situation in Zagreb is related to new construction, and on this occasion we mean buildings built in the last 15 years, that if a buyer has, for example, 200,000 euros and wants a three-room apartment of about 70 square meters, they will hardly find it on the market.
- The biggest losers in Zagreb are actually buyers who have about 150,000 - 200,000 euros, which means a lot of money which is realistically something, but it is nothing if you are looking for newer construction for the family. The offer of such apartments from 60 to 70 square meters is small, and the prices are high - explains Jasna Biliškov Barun. The poor housing policy of the state and the City of Zagreb is largely to blame for this absurd situation. Demand for apartments in newer buildings has increased further since the quake.