Despite the introduction of the euro, inflation and expensive square meters, the demand for apartments and houses is still high. In contrast to parts of Europe, such as Germany, where prices are falling, they currently reach up to 10,000 euros per square meter. Is there still room for growth, if and when the real estate market will stabilize, and can a household with an average income get its own property in larger cities?
Will real estate prices in Croatia fall?
What about real estate prices?
Despite the high prices, new construction is in great demand, expensive square meters are sold before they even start to be built. Lana Mihaljinac Knežević , Croatian Chamber of Commerce, explained to HTV Dnevnik that average real estate prices are higher.
– Newly built real estate is in high demand in Zagreb due to the earthquake and represents a better investment than used real estate, she added.
Mihaljinac Knežević said that there are several reasons for investing in real estate, and one of them is inflation in order to preserve the value of money and the introduction of the euro.
Old construction
She also pointed out that the price of old buildings is increasing because there is no publicly available source of realized prices.
– During the formation process, citizens are comparing new construction projects near their existing buildings with the requested prices on real estate search engines, said Mihaljinac Knežević.
She added that APN led citizens to buy overpriced real estate, but also that this trend is changing because there is a decline in transactions.
– We see a greater divergence between the requested and realized prices and we believe in the profession that the decreasing number of overpriced real estate in the segment of used residential real estate will continue to be sold. New construction will probably continue to fetch higher prices, said Mihaljinac Knežević.
The most expensive real estate on the coast
The most expensive properties are on the coast, every fourth buyer is a foreigner, but inflation has taken its toll on the outside as well. Lana Mihaljinac Knežević said that the market on the coast is under the economic influence of the real estate market of the countries from which the buyers come.
– Last year there were the most buyers from Germany, we know that the economic situation and the situation on the real estate market are changing there, we have to wait for the numbers and see what will happen this year. The coast is also attractive to foreigners as an investment from a tourist rental, she explained.
Mihaljinac Knežević said that the real estate market will slow down as citizens become aware of how much money they have.
– I am afraid that this year there are fewer and fewer people who can afford unrealistically valued real estate, she added.
Apartment rental prices
The expert pointed out that subsidizing rent was not supposed to be a form of housing affordability.
– In our country, property is highly valued, it is considered a status symbol and a form of investment. Young people would rent a property because they cannot afford the overpriced square meters to buy. The lack of supply also prevails in the rental market, and tourism is the primary reason for that, said Mihaljinac Knežević.
Mihaljinac Knežević said that the person who plans to buy real estate must carefully analyze his financial situation and inquire about the terms of the loan.
Real estate prices also rose during the summer, analysis shows. On the market, however, there is a big difference in the prices of square meters in Croatian cities, and the range is from 1,350 to 10,000 euros per square meter. The most expensive are Opatija, Dubrovnik, Split, Zagreb.
– We have a whole set of prices, from seven to ten thousand are top properties like this one where we are in a top position in the city center, while all other properties from two and a half to five thousand are in better locations, explained Sanjin Rastovac for HTV Dnevnik , real estate broker.
Demand is high because almost every fourth property in Croatia is bought by a foreigner. A good tourist season favors the increase in the price of square meters.
– Citizens earn a lot of income through tourism, they are taxed low, so their profits from these activities are also whiskey, they have their own funds and very often invest in real estate, which protects the value of their money in addition to inflation, said Lana Mihaljinac Knežević, representative of the Real Estate Business Association . at HGK.
Possible price stagnation
In the rest of Europe, including in Germany, real estate prices began to fall due to rising interest rates, in Croatia, according to analysts, price stagnation is possible.
– My opinion is that the prices will be as they are now and that there should not be any major jump, possibly even a small downward correction, pointed out Darko Radelja , real estate broker.
Fewer and fewer citizens, especially young people, can afford a roof over their heads.
– Very difficult because in the last two years they have risen significantly and every year there is a tendency to grow. I am surprised how anyone buys it at all, said the citizen.
In the last eight years, 36,000 families bought their first property with APN’s loan subsidization program. Critics point out that APN was still the main driver of price growth.
The line minister announced a national housing policy plan that includes subsidized rent.
– The construction of multi-apartment houses that would be intended for fellow citizens who cannot buy an apartment through credit, to make these apartments available to them through a preferential subsidized rental price, I think this is one of the ways to solve the housing issue of fellow citizens, and clearly with the continuation of POS apartments, explained Branko Bačić , Deputy Prime Minister and Minister of Spatial Planning, Construction and State Property.
Despite high prices, interest in real estate, especially new construction, is still high.