April 10, 2022 - A look at the current state of the Dubrovnik real estate market from the vice president of the Professional Group of Realtors in the Dubrovnik County Chamber of Commerce, Nada Burum.

As the pandemic subsides, Nada Burum, vice president of the Professional Group of Realtors in the Dubrovnik County Chamber of Commerce, comments on how the past and current crises impacted the real estate market in the Dubrovnik area, reports Dubrovacki Vjesnik. 

During the pandemic, prices rose further to slow trade, which is happening now because of the war in Ukraine. Partially disabled business raises the cost of food, energy, building materials, transportation of goods, and real estate prices. The pandemic period was marked by rising prices in construction, which affected the growth of residential squares, especially new construction.

Inflation is rising. At the same time, foreigners are investing heavily in real estate in the Dubrovnik area. Asking prices can be outside the real range, but ultimately the market is affected by the law of supply and demand. Dubrovnik is a small city, a pearl, and it is not unusual for some luxury properties to have a high and unrealistic price. Dubrovnik is among the most desirable cities in Croatia, and for the last twenty years, it is, therefore, one of the most expensive cities.

Will the weakening purchasing power of citizens hurt the real estate market? Is there a decline in traffic or vice versa?

As a rule, customers who have a surplus of funds benefit from changes in the market. Negative interest rates in the banking sector have recently contributed to this, among other factors. Real estate is a desirable form of investing and preserving the value of money. Therefore, interest in buying real estate in Dubrovnik and Zagreb has increased. Indicators of the increased demand of citizens for real estate purchases may be the need to resolve the housing issue due to uncertainty about future prices and interest rates when obtaining a loan.

What about the prices of residential square meters? The Covid crisis did not significantly impact prices; they even grew. Have they recently been corrected for more since we are witnessing price increases for almost everything?

The rise in prices for construction materials caused a big jump in the price of residential square meters in new construction in a short time. We recorded in the office in Dubrovnik at the end of 2021 and the beginning of 2022, i.e., in a very short period, an increase in prices of apartments in new construction between ten and fifteen percent. This is a reflection of market instability.

What are the prices in Gruž, Grad, and Lapad?

Gruz ranges from about 3,000 to 3,800 euros per square meter, and the price can be higher for better apartments. Lapad ranges from about 3,500 to now 5,000 euros per sqm, and exceptionally in Lapad, there are properties around 7,000 euros per sqm due to certain higher parameters. The city and Ploče range between 5,000 - 8,000 euros per sqm, but much more if it is a luxury property. Suburban locations are priced lower. Despite the stated prices, apartments with a sea view, especially if there are few of them on the market, are selling quickly.

In the Dubrovnik area, buying a property is more often seen as a good investment for tourist purposes that will pay off over time. But, since tourism has suffered for the last two years, have tourism-related real estate purchases dropped?

Slight caution was felt at the start of the pandemic, with properties used exclusively for tourism purposes. But it was at that time, some investors reacted and then bought real estate within the city center. With the return of optimism in the tourism sector, interest in investing in real estate of this type has increased.

What about the supply, is there any growth in that? The economic crisis may have forced some to sell apartments, holiday homes, flats ...

I am very pleased to say that our citizens were not forced to sell their property during the pandemic. I am a little emotional here when it comes to Dubrovnik, and in general, it is not easy to hear that someone is in crisis, so they will sell their property below its value. Even though I do real estate, I am always for a realistic market price.

What is the interest of foreign buyers and investors in real estate on the coast, which, realistically, has always been attractive to foreigners, especially in the Dubrovnik area? Is the Croatian coast still in their focus?

Foreigners are particularly interested in our sea, the coast, luxury real estate, the realization of such sales is more and more. They appear as larger investors who would develop projects and buyers who recognize Dubrovnik as a "second home." Investments in the market are needed; it is nice that Croatia is a desirable country and that foreign citizens often find a new home in Croatia. At the same time, it would be desirable to make every effort to ensure that our young people do not leave Croatia due to a lack of prospects in their country or due to the high price of apartments that they cannot afford working in Croatia. Let us hope for change for the benefit of our young people.

Through UTD Ragusa, the city of Dubrovnik became the owner of thousands of square meters of attractive space in Gruž, the former TUP plant, but also in Komolac. How do you comment on this move?.

The City of Dubrovnik has made an excellent move by purchasing this property, i.e., acquiring ownership of 9,800 m2 of land at the strategic location of the former TUP in Gruž, including 14,000 square meters in Komolac. It is a move that represents an excellent perspective for the City by contributing added value and benefiting the citizens. The assets are estimated at 18.6m euros. Through legal and in-depth analysis, the City excluded the risks of the subject of the purchase and concluded the justification for purchasing the joint-stock company. The price of about 10 million euros is realistic. This is a good job for the City of Dubrovnik. The position of the former TUP in Gruž has a high potential for the development of various content, commercial, public, and especially returns through multiple forms of the lease, depending on the strategic projection that the buyer will choose to return and improve the investment.

Several parameters determine the value of the land. One of the most important is calculating or projecting the yield that the property will bring once the project comes to life.

Real estate prices are rising despite changing economic trends. With this project, the city will significantly contribute to the future development of Gruž. Dubrovnik deserves to be enriched with harmonious buildings and preserve the City's identity.

The TUP area is unique, with excellent connections to the Port of Gruž. Therefore, it is a position that offers a lot of opportunities. In the real estate business, we have been monitoring the value of the particular real estate in Gruž in recent years, especially in the lower part of Gruž, a beautiful pedestrian zone. Their value will continue to grow because there is less supply than demand.

Buying a large building plot is a long-term investment. Some serious investors were interested in buying TUP property and saw a profitable investment in such a desirable location at the western entrance to Dubrovnik.

For more, check out our lifestyle section. 

April the 10th, 2022 - Two entire years since the earthquake which rocked us here in the capital have passed, and Central Zagreb is now home to fewer and fewer residents. This topic, among others, was discussed at the Days of Architects, which has been taking place down in Dubrovnik.

As Poslovni Dnevnik/Darko Bicak writes, the city and its people has been the central theme of the sixth Days of Architects, which opened on Thursday in Dubrovnik, organised by the Croatian Chamber of Architects. The opening was held at the Akademis student dormitory, for which architects Tin Sven Franic, Ana Martincic Varesko and Vanja Rister were awarded the Vladimir Nazor and Viktor Kovacic awards.

The President of the Croatian Chamber of Architects, Rajka Bunjevac, pointed out that architects should be open to the spaces in which they work, but also to the people for whom they're designing. Along with the unenviable urban situation in which most Croatian cities find themselves, we are now in yet another unenviable situation. The European Union urgently needs to reduce its dependence on fossil fuels imported from Russia.

Thanks to its natural potential, Croatia has opportunities for the much greater use of its solar energy for energy production.

"Croatia needs measures that aren't just there to fight fire, subsidising the price of energy that the government is implementing can't last long. A very uncertain autumn and winter await us and it's high time for substantial and structural changes. Architects know what their jobs are, they know how important it is to respect the given framework of space, how important green infrastructure is to each individual neighbourhood, but politics is the place from which all of this starts. An individual can contribute to change, but without politics, things for the profession become frustrating. It's a terrible thought that a project like the student dormitory in Dubrovnik has been running for fifteen years and that the Public Procurement Act has been amended twice during that time - making any innovative ideas more difficult and slow. It's the same thing today with renewable energy sources and energy efficiency,'' said Domac.

He added that significant funds are being spent on subsidising increased energy prices, but noted that this will not bring greater resilience to future high energy prices and their sudden changes. That is why the team from REGEA is developing new concepts for family homes, public buildings and residential apartment buildings with which they will appear before all key decision makers. 

''Croatian buildings urgently need to start producing energy and at the same time be much more energy efficient. We must be ready for the coming winter. At the moment, we don't have a vision of how we're going to deal with one-time incentives, weekly price changes, masks and covid measures and government reshuffles,'' said Domac, adding that not enough is being said about energy saving and energy efficiency measures that can help people here and now. It's well known that a reduction in room temperature of 1oC reduces the consumption of natural gas by 7-8 percent, and buildings account for a total of 40 percent of energy consumption. In such conditions, solar power plants must become an obligation down on the coast, as must centralised heat production in continental Croatia. Individual gas heating must become a thing of the past, for safety, economic and climatic reasons,'' pointed out the head of REGEA.

Cities across the nation are continually struggling with construction disorder and a lack of urbanism, especially Central Zagreb whose heart has lost 50 percent of its resident families, Sisak and Petrinja which are still looking for a complete solution, the gas situation regarding Russia and the climate change we are witnessing.

For more, check out our lifestyle section.

April the 10th, 2022 - Is Croatia expelling Russian diplomats in the face of the horrendous invasion of Ukraine and the alleged war crimes that have since taken place there at the hands of Russian troops? The sanction list of Russian names is long indeed and the Security and Intelligence Agency is also involved.

As Morski writes, five months after, as he put it, he "discovered the warm and poetic soul of Sergei" and read poetry by Russian Foreign Minister Sergei Lavrov in Russian, Croatian Foreign and European Affairs Minister Gordan Grlic Radman has written a decision to expel Russian diplomats from the Republic of Croatia.

This comes as a very important sign of solidarity and a response to the latest developments and brutal Russian aggression in Ukraine where we're being stunned by the crimes and horrors committed by the Russian army in that innocent country.

''In addition to expelling Russian diplomats, we are also actively working on freezing the property of those persons under sanctions,'' Minister Gordan Grlic Radman revealed for RTL. State Secretary at the Ministry of Foreign and European Affairs Frano Matosic also added:

''There are 893 persons and 65 legal entities on our sanctions list. We expect this situation to change soon again, given that a new package of measures will be adopted in Brussels. Russian diplomats in Croatia, among other things, are being left without the luxury they enjoyed, primarily on the coast, as well as the freezing of the money in their accounts. Their companies are being frozen, in terms of preventing those persons on the sanctions list from using these economic resources to extract funds that could be passed on for aggression against Ukraine,'' said Matosic.

Otherwise, that number is much higher, because not all of the seized yachts whose connection with Russia is being established are counted. The real owners are known for three of them. Croatia doesn't decide on the sanctions independently, those decisions are made in Brussels. The rich often try to hide everything they have, so they register their property on distant islands and in third names, making it challenging to determine what is actually Russian-owned and what isn't.

When it comes to the question of whether or not SOA (Croatian Security and Intelligence Agency) helps in determining what is Russian property in Croatia, the answer is that of course it does.

The Russian Embassy in Zagreb is also closely following everything that is happening, and when asked about the expulsion of Russian diplomats from this country, they say that they don't want to comment on it until they receive official information from the Croatian Government.

For more, check out our politics section.

April the 10th, 2022 - The Russian Sberbank has now sold its former 43 percent stake in Fortenova to the Hungarian Indotek company, Fortenova CEO Fabris Perusko has announced.

As Jutarnji/Novac/Andrea Koscec writes, the Russian Sberbank has sold its 43 percent stake in the Fortenova Group to a Hungarian investment fund called Indotek Group, majority owned by one of the richest Hungarians of all, Daniel Jellinek, Bloomberg reported, and soon after, Fortenova confirmed the information on its website.

The price involved hasn't yet been announced, but it was pointed out that in order to conclude the transaction, it was necessary to provide solutions from the competent regulatory authorities across several markets.

In mid-March, Jutarnji list reported that it had "started an in-depth analysis process related to the possible sale of shares within the company" and then announced that Jellinek, who Forbes estimates has a net worth of around 300 million euros, was interested. It was speculated back then, although such processes usually take months, that given the development of the situation in Ukraine and the obvious interest of Sberbank to get out of ownership in Fortenova, an agreement could be reached long before it would otherwise be expected. A spokesman for Daniel Jellinek told Bloomberg that Jellinek sees the deal as a long-term investment, and Indotek will be a strategic partner of the Fortenova Group.

On the occasion of the signing of the sales contract and the announced change of ownership, Fabris Perusko, CEO and member of the Board of Directors of the Fortenova Group, welcomed the entry of Indotek into the ownership structure, which he said recognises as a long-term strategic partner in the co-ownership of Fortenova.

''Despite a possible change in co-ownership, the Fortenova Group continues to operate on a regular basis. Our operating companies are successfully managing market disruptions caused by rising operating costs and disruptions in some supply chains that our many customers aren't feeling and we're fully focused on preparing for this year's season from which we have significant expectations,'' said Perusko.

The Hungarian Indotek Group manages assets worth more than three billion euros in total, and according to its website, Indotek is a financial conglomerate owned by Hungarian and American investors, with a diversified business in real estate, financial services, but also logistics and transportation. The company employs 380 people, is headquartered in Budapest and has 12 branches across the country, as well as its own offices in Spain, Italy, Romania, Poland, Greece and here in Croatia.

Indotek has now become Fortenova's largest single shareholder, but - like the Russian Sberbank has been so far - it will have to seek the consent of the two remaining major shareholders - Pavle Vujnovac, the owner of Enna Group, and Russia's state-owned VTB Bank, which holds a seven percent stake in Fortenova, and is currently sanctioned.

The Fortenova Group is otherwise the largest food trader and producer in Southeastern Europe, and was formed after the settlement of the former Agrokor's creditors back in April 2019. Its financial situation has improved significantly over more recent years, as evidenced by its debt-to-operating ratio (EBITDA). It employs about 50,000 people.

For more, check out our business section.

April the 10th, 2022 - A concerning amount of Croatian retirees have decided to take up work despite drawing their pensions owing to continue financial difficulties and a frequent struggle to make ends meet.

As Poslovni Dnevnik writes, research for the development of a socially innovative programme to encourage and support Croatian retirees shows that as many as 74 percent of those drawing their pensions who participated in reactivation in the domestic labour market stated financial issues as a reason for them returning to work, as was reported by the portal Mirovina/Pension. This is the information that the Ombudsman Tena Simonovic Einwalter warned about in her annual Report for 2021.

According to the latest available data for the month of February, 19,692 part-time workers in Croatia were retirees, which would mean that more than 14,500 retired employees work because they don't have enough money to live on, or because they have to.

In addition to the fact that pensions are insufficient for most people, many Croatin retirees continue to go to work because they haven't yet repaid some kind of loan or settled some other outstanding financial obligations, such as debts for utilities, foreclosures and the like.

Therefore, although perceived as a benefit, the reactivation of Croatian retirees on the labour market is often the result of their poor financial situation and pensions from which they simply cannot live, the aforementioned ombudswoman warned.

According to the survey, Croatian retirees were most often employed as salespeople (51 percent) and bus drivers (22 percent), followed by chefs and assistant cooks, telephone interviewers, transfer drivers, valet and facade makers.

“Croatian retirees have access to mostly low-paid jobs that require a lower level of education. This is a consequence of the fact that some groups are legally barred from continuing to work in their professions, such as school staff,'' Einwalter said in her report.

The labour market isn't particularly favourable when it comes to hiring Croatian retirees, and one of the biggest difficulties in finding a job in the survey is the existence of prejudices among employers about retirees as a homogeneous group without much potential.

For more, check out our lifestyle section.

ZAGREB, 9 April 2022 - Croatia will increase its assistance to the friendly Ukrainian people and as part of the Global Citizen Impact initiative commit an additional €100 million to Ukrainian refugees, Prime Minister Andrej Plenković said on Saturday.

"As the brutal Russian aggression against Ukraine continues, we wish to express support and solidarity with the Ukrainian people," Plenković said in a Twitter post.

"Croatia pledges to commit an additional €100 million to Ukrainian refugees" to be taken in by Croatia, he said.

"In this difficult time for the Ukrainian people, we will continue with our support, solidarity and assistance, standing with Ukraine and Ukrainians," he said.

Since the start of the Russian invasion of Ukraine on 24 February, four million people have fled the country, according to UNHCR.

According to the latest data, there are more than 12,600 Ukrainian refugees in Croatia.  

For more, check out our politics section.

ZAGREB, 9 April 2022 - Croatian Foreign Minister Gordan Grlić Radman said in Krakow on Saturday that the city had responded in a good and organised way to the arrival of refugees from Ukraine fleeing the Russian invasion, who have increased the city's population by some 20%.

"Krakow has been faced with refugees not since yesterday but since 2015. At the time, Europe took in around one million migrants, including illegal migrants. Today there are 2.5 million refugees in Poland alone, and they have been promptly integrated," Grlić Radman told reporters after meeting with the mayor of Krakow, who, he said, "was also interested in our experience with refugees during the Homeland War."

Speaking of the refugees from Ukraine, he said they left their country fleeing the Russian aggression and that they had been given a friendly welcome.

The refugees have been enabled to continue with education and have been provided with adequate accommodation, Grlić Radman said.

Krakow Mayor Jacek Majchrowski said the refugee crisis was putting huge pressure on the city administration, with the refugees now accounting for close to one quarter of the city's population.

Majchrowski explained how their reception and integration had been organised but stressed that the problem was that "women, children and the elderly have come here while men, who could work in Poland, have returned to Ukraine."

Since the start of the Russian invasion of Ukraine on 24 February, four million people have fled the country while the total number of those displaced exceeds ten million, according to UNHCR.

More than 2.52 million Ukrainian refugees have arrived in Poland, according to Polish border services.

For more, check out our politics section.

ZAGREB, 9 April 2022 - Croatia's President and Armed Forces Supreme Commander Zoran Milanović on Saturday attended the military exercise "Shield 22", taking place on the "Croatian Army 119th Brigade" training ground at Cape Kamenjak in Premantura near Pula, the Office of the President said in a statement.

Participating in the combat shooting exercise were members of Croatian and US armed forces.

The purpose of the exercise was the demonstrate the capabilities of air defence units in detecting, tracking and shooting down targets in airspace.

The exercise is taking place from 4 to 13 April. It has been held regularly for 27 years and this year US army members joined in for the first time.

The exercise was also attended by Croatian Armed Forces Chief-of-Staff Admiral Robert Hranj, the Croatian Army Commander, General Boris Šerić, and other military officials, President Milanović's advisor on defence and national security, Dragan Lozančić, as well as representatives of the US army.

For more, check out our politics section.