April 22, 2022 - Another round of applications for the APN subsidies ends today. Croatia's State Real Estate Agency (APN) say that they have never received more applications, almost five thousand, but it remains uncertain if all of them will receive the subsidies. Demand is growing, and the rise in housing prices which is directly linked with the provision of subsidies does not help either.

As SiB writes, there aren't that many apartments, while potential buyers are numerous. For a few years now, the demand for apartments has been just as wild as the rising prices of these precious square metres. 

"For what was the price of a two-bedroom apartment a year ago, now you can only buy a one-bedroom apartment. In Zagreb, the average price per square meter is 2,300 euros, in Rijeka 1,900, in Split 3,000, and in Osijek 1,050 euros," shared Luka Prica, the owner of a real estate agency, with RTL.

Less than 24 hours remain until APN applications are closed. A record 4,870 requests were received, and funds are limited, with HRK 50 million provided.

First come, first serve
"All the applications that were submitted in time, up to the request number 4,100 if all documents are complete, will be processed and approved accordingly", said Goran Golenić, assistant director of APN.

In previous years, it never happened that someone did not receive the subsidies, but APN warns - we can not guarantee that it will be the same this time around. Those who have submitted their applications first are at an advantage. So far, 2,462 applications have been approved in this round.

"When the funds are spent, we will inform the competent authorities and make decisions on further actions accordingly," Golenić claims.

Better days with cheaper square metres, it seems, are not in sight.

"We are entering the Eurozone, inflation has been announced, we are witnessing an increase in the prices of materials and labor - we cannot expect a drastic drop in prices," Prica claims.

Surely, the new round of APN subsidies announced for next year will come in handy for many.

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ZAGREB, 31 March 2022 - Most deputies in the Zagreb City Assembly on Thursday supported a proposal to take a new short-term loan in the amount of €50 million, with a repayment period of 12 months, and the funds will be used to improve the liquidity of the city-owned companies.

Thirty million of the 50 million euro loan will be used to improve the liquidity of the Zagreb Holding multiutility conglomerate and 20 million for the liquidity of the ZET public transportation company. The city will take a loan from the European Bank for Reconstruction and Development.

Even though it was endorsed, the proposal to seek the loan was criticised by some opposition parties, and the Croatian Democratic Union (HDZ) deputies objected that since the start of his term Mayor Tomislav Tomašević had taken loans in the amount of €1.1 billion.

Tomašević replied that the city was taking loans in order to settle the accumulated debt of the previous city government in the amount of €1.4 billion.

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ZAGREB, 24 March 2022 - Physical Planning and Construction Minister Ivan Paladina and the director of the Zagreb-based KBC - University Clinical Hospital, Ante Ćorušić, on Thursday signed an agreement on the €70 million "Stage III" reconstruction project of this hospital.

A new multi-purpose building will be constructed within the existing hospital compound and the funds earmarked for the construction and reconstruction has been secured with a loan from the World Bank. 

The new hospital will be over 27,800 square metres large, and will have eight floors with an open parking lot on five levels and an emergency heliport.

Paladina underscored that the project is an example of quality and concrete cooperation between the KBC hospital, the competent ministry and expertise.

"When we have a clear common objective and when everyone involved in the project gives a maximum contribution then things function. This is in fact a positive example of what we want to apply to all other post-quake reconstruction procedures with an even greater active participation of the state and profession, and citizens themselves," Paladina said.

Ćorušić underscored that Stage III is part of a strategic document for the KBC's development for a ten-year period and that in 2018 a feasibility study had already been conducted regarding the relocation of the Šalata Hospital to the Rebro KBC.

The project was delayed because of the earthquake but now we have obtained a World Bank loan of $81.8 million and an additional €25 million through the National Recovery and Resilience Plan, said Ćorušić.

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ZAGREB, 31 Aug, 2021 - Household deposits rose by 1.4% that is by 3.3 billion from June to July, and increased 8.4% on the year, according to the data released by the Croatian National Bank in its "Comments on monetary developments for July 2021" publication.

Total deposits in Croatia reached HRK 350.7 billion in July, going up by 8.5 billion kuna or 2.5% from June, and jumped by 31.1 billion kuna or 9.7% comapred to July 2020.

"The growth in total placements of monetary institutions to domestic sectors continued to accelerate in July, mirroring growing household lending, primarily in the form of housing loans that rose fuelled by the government subsidy programme. The placements to other financial institutions also rose, while placements to corporates fell," the HNB says in its comment.

"Total placements of monetary institution to domestic sectors (except the central government) rose in July by HRK 1.5bn or 0.6% (transaction-based) from June and stood at HRK 242.2bn at the end of the month. The annual growth rate of total placements accelerated from 3.8% in June to 4.1% in July. The monthly increase in placements was almost entirely due to the growth in loans which stood at HRK 236.5bn at the end of July," says the central bank.

Broken down by sectors, household loans rose the most (HRK 1.3bn or 1.0%) driven by the government subsidy programme, which continued to propel a strong growth in housing loans (HRK 1.1bn or 1.7%), while general-purpose cash loans continued to rise moderately (HRK 0.2bn or 0.4%).

On an annual level, the growth in housing loans continued to accelerate, having risen from 10.1% to 10.6% and so did the growth in general-purpose cash loans, which rose from 0.2% to 0.6%, resulting in an acceleration in the growth of total loans to households from 4.0% to 4.3%, the central bank reports.

(€1 = HRK 7.483066)

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ZAGREB, Sept 11, 2020 - The Conflict of Interest Commission found on Friday that FinMin violated the principle of good conduct by participating in a decision by the Croatian Bank for Reconstruction and Development (HBOR) to grant a loan to a company owned by his friend Josip Stojanovic Jolly.

The procedure against Maric was launched in December last year due to the possibility of bias because, in his capacity as finance minister and president of the HBOR supervisory board, he did not excuse himself from the decision to issue a loan to Stojanovic's Olympia Vodice company, which was issued with an HBOR loan for the construction of a hotel even though he had made it clear in his statements to the media that Stojanovic was a friend of his.

The commission decided on Friday that Maric was not in conflict of interest but rather that he had violated the principle of good conduct, which is not subject to any penalty.

The commission also found that Maric had not violated the law by attending a World Cup match in Russia where he was seen in Stojanovic's company, as Maric provided evidence that he personally paid for his ticket.

In a second case, the commission found that Zagreb Mayor Milan Bandic and members of parliament who crossed the floor and joined his parliamentary group had not violated the law.

The commission decided on each individual member of parliament who crossed the floor and joined Bandic's party and whether they were rewarded for that with some counter-favor. The commission found that no violation had occurred with regard to the Conflict of Interest Act.

The procedure involved Mayor Bandic and Members of Parliament Marija Puh, Mladen Madjer, Milanka Opacic, and Sinisa Varga who crossed the floor in parliament, as well as Deputy Mayor of Donja Stubica Luka Grabusic and Radoboj Mayor Andjelko Topolovec who too joined Bandic's party.

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ZAGREB, Aug 25, 2020 - In April 2020, companies in Croatia borrowed HRK 10 billion to finance overheads or rollover loans, which was a record high borrowing in the last five years, Vecernji List daily said on Tuesday.

At that time the COVID-19 pandemic halted the operations of almost one in five companies, notably those affected the most by social distancing, as a result of which their revenues in the first month of quarantine dropped over 90%.

Due to the latent danger of the reactivation of the same or similar viruses, companies whose business requires close contact with clients will have to restructure their business models, the Croatian National Bank (HNB) says in an analysis.

Borrowing in 2019 was dominated by new loans for current assets and investment, but since the epidemic outbreak, there have been virtually no investment loans. In March, April, and June, between 85,000 and 100,000 legal entities with nearly 600,000 employees in total received HRK 6 billion in job-retention aid. Over 90% of those entities were micro-enterprises.

The aid helped them to survive and swiftly adapt their operations, the HNB says, warning that extending non-selective aid in the long term could keep companies with untenable business models on the market as well, slowing down the redirecting of funds to healthy companies expected to help with economic recovery.

Zeljko Lovrincevic of the Zagreb Institute of Economics believes the demand for borrowing will increase because tax payment deferrals are no longer in force.

The HNB notes that many companies have swiftly adapted their business models through digitalisation and by relying on delivery channels for their goods and services. Some sectors have additionally profited such as IT solutions providers and courier services, the daily said.

(€1 = HRK 7.5)

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ZAGREB, June 29, 2020 - Household loans totalled HRK 133.9 billion at the end of April 2020, breaking a month on month growing streak that had continued since the start of 2018, while the annual growth continued, according to data from the Croatian National Bank (HNB).

Household loans fell by 1.1% from March 2020 and rose by 4.8% compared with April 2019. The positive annual growth rates have been present since September 2017, showing a tendency to slow in 2020.

"Considering the dented optimism, expectations and deteriorations on the labour market, as well as a greater aversion to risk, we expect credit demand to weaken in the coming months due to new developments" triggered by the coronavirus crisis, Raiffeisen Bank (RBA) says in an analysis of the HNB data.

Analysed by currency structure, the share of loans denominated in the national currency, the kuna, remained at 54.4%, the same as in March. Kuna loans totalled HRK 72.9 billion, with the annual growth rate slowing to 8.2%. This broke their double-digit annual growth rates that had continued since November 2015.

Foreign currency-pegged loans reached HRK 61 billion, up by 1% from April 2019. Most of these loans were denominated in euro, and their growth was driven by foreign exchange movements as the euro exchange rate against the kuna increased by 1.9% compared with April last year.

By type of credit, the largest share (43.7%) accounted for housing loans, totalling HRK 58.5 billion and growing at an annual rate of 7.2%. This type of credit has been on the rise since November 2017. General-purpose cash loans rose at an annual rate of 6.4% in April, compared with a growth rate of 9.1% in March.