December 8, 2022 - The Croatian real estate market is behaving in interesting ways. The difference between the requested and realised real estate prices is increasing, and is currently reaching around 15 percent, which means that the owners' demands are not always realistic, especially when it comes to used real estate, it was pointed out on Wednesday at the 34^th Real Estate Business Forum.

As Index writes, the forum was organised by the Real Estate Association of the Croatian Chamber of Commerce (HGK). As the president of that association, Dubravko Ranilović, said, it is not yet possible to say with certainty what the next year will look like, but he believes there will be a change in trends.

"There will be a certain slowdown in the real estate market; prices cannot rise indefinitely in this way," said Ranilović.

The economy of the EU, including Germany, is slowing down due to the crisis and heading towards recession, interest rates are rising due to inflation, and given that more than a third of real estate buyers in Croatia are foreigners, this will be reflected in the Croatian market in the next year, he assessed.

Ranilović stressed the importance of differentiating the Croatian market, with the coast largely dependent on foreigners, and the rest mainly on Croatian customers.

Regarding foreign buyers, the data of the Tax Administration show that, since last year, there have been a total of 31,361 sales of houses or apartments, 9,491 of which were sold to foreign buyers.

From July 2021 to June 2022, foreigners bought 12,518 residential properties in Croatia, or 36 percent of the total. With 3,501 purchased properties, Germans are in the lead, followed by Slovenians with 3,090. The number of real estate sales to foreigners is constantly growing, and Ranilović pointed out that in some cities in the coastal counties, it exceeds 90 percent.

The phenomenon of "neighbour's optimism"

When it comes to the overall state, Ranilović pointed out that the requested prices of real estate are growing at significantly higher rates than realised prices, which means that the prices and demands of owners are not realistic everywhere, which especially applies to used real estate. Moreover, the difference between the requested and realised prices is increasing, and according to some estimates, it already reaches close to 15 percent on average while at the beginning of the year, it was only ten percent, pointed out Ranilović. Some call this phenomenon "neighbour's optimism," in the sense that it is difficult for someone to give up an amount that they heard someone else achieved, he added.

When it comes to apartments, for example, data from the real estate market for 2021 show that the requested price per square meter for apartments in Croatia was 2,197 euros, and the achieved price was 1,731 euros. At the same time, the average realised price per square meter for apartments in Zagreb was 1,847 euros last year, an 2,047 euros on the coast.

New build leads in prices, where quality properties in good locations are sold quickly, but what is being built is not enough to satisfy needs. On the other hand, used real estate is not up to standard; therefore the existing housing stock, which is generally poor, that is, insufficiently maintained, should be significantly improved, Ranilović said.

"The aim of the profession is for the market to move within as realistic a framework as possible"

He explained that the asking price is the subjective opinion of the owner about the value of the property, so if the market "goes down", only those who have to sell will first sell at lower prices, while it takes six months to a year for others to correct their prices. "People will have a hard time accepting reality. That's just the way it is," asserted Ranilović.

He told the large number of people gathered from the real estate sector at the Westin Hotel, more than 700 of them, that they should be a "real stabiliser of the real estate price market," and not "flatter the owners" to further encourage price growth and "inflate the bubble." "The more that bubble inflates, the more difficult it will be for us later," said Ranilović.

As some good news, he cited the growth in the number of construction land transactions, which last year was 19.6 thousand, considering that this also assumes future business activity.

The adviser to the president of HGK, Josip Zaher, said that the goal of the profession is for the market to move within as realistic a framework as possible, in order to mitigate the consequences of a possible slowdown and to avoid a repeat of the 2008 crisis. He pointed out that as a result of the present inflation, the prices of construction materials and labor have also increased, so the prices of real estate have also increased significantly.

He reported that in 2021, around 135,000 transactions, worth more than HRK 60 billion, were realised on the real estate market.

State Secretary in the Ministry of Economy and Sustainable Development Nataša Mikuš Žigman pointed out that last year's value of real estate transactions accounted for 14 percent of GDP, which testifies to how "vibrant and alive" the real estate market is.

Housing affordability is a growing problem

Member of the council of the Real Estate Business Association HGK and owner of the Zagreb West agency Lana Mihaljinac Knežević stated that, in case of continuation of the current macroeconomic trends, in the next year "price stabilisation can definitely be expected".

Concerning new builds, considering that the offer is not sufficient, there should not be any major changes, while for old buildings, especially in Zagreb and on the coast, owners are expected to change their expectations and lower the asking prices, Mihaljinac Knežević pointed out.

She said that the affordability of housing in Croatia is becoming an increasing problem, and therefore a systematic strategy is needed, and there have been announcements of such projects in Zagreb.

Agricultural land is the most traded real estate product, and further growth of such transactions is expected because the moratorium on the purchase of agricultural land by EU citizens ends next year, said Mihaljinac Knežević.

For more, make sure to check out our dedicated Lifestyle section.

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.

For more, check out our lifestyle section.

ZAGREB, 5 June 2021 - In 2020, the year of the pandemic and two devastating earthquakes, almost 32,000 properties were sold in Croatia, only 3,000 less than in 2019, and the fall mainly occurred along the coast, while almost one in two properties in Istria was bought by foreigners, Večernji List daily said on Saturday.

The highest number of flats, about 12,000, was sold in the City of Zagreb and Zagreb County, followed by a little over 10,000 properties sold in the coastal counties and a little over 9,000 in the rest of the country.

The rest of the country recorded the smallest drop in sales, about 2%, while the drop along the Adriatic was almost by one-fifth due to fewer foreign buyers. The drop in Zagreb and its environs was 4.5%.

In terms of the coast, last year foreigners bought four in ten properties sold in Istria County, three in ten in Primorje-Gorski Kotar County, one in four in Zadar County, one in five in the Dubrovnik and Šibenik areas, and 16% in Split-Dalmatia County.

As for continental Croatia, foreigners bought 2% of the properties sold in Međimurje and Varaždin counties.

Most of the foreign buyers were from Germany, Austria and Slovenia.

In 2020, the housing market showed resilience to the current crisis, so stronger risks to financial stability linked to that market could occur in the period ahead, according to the central bank.

For more, follow our dedicated business section.

A large Šibenik investment is underway, with construction permits expected to be granted in the spring, and works set to begin just after the end of 2019's summer tourist season.

As Suzana Varosanec/Poslovni Dnevnik writes on the 2nd of January, 2019, Zagreb Montaža Grupa (Montage Group) and ZM Development for design and construction, both headquartered in Zagreb, have gone about preparing the ground in the historic Dalmatian city of Šibenik for this year in order to intensify new, large real estate projects - Draga and Podsolarsko. The total value of the foreseen investments is approximately 110 million euro..

Partnership with the Austrians

Otherwise, this project refers to one of the largest Croatian construction companies with about 1,500 employees, and which is mostly engaged in jobs related to European Union export markets. It appears that the Draga project will be realised in partnership with an Austrian real estate company, while Podsolarsko will be run independently. Judging by what is known at the moment, both projects are gradually moving towards realisation at the same time, a fact which seems to have served as a "trigger" for completing the necessary spatial-planning and other paperwork for Podsolarsko at the end of 2018.

As they are currently navigating through the waters of the highest status of administrative preparation in Šibenik, and a quick procedure for the issuing of the necessary building permits is expected, which according to the current announcements should be resolved in the spring. After the upcoming summer tourist season, these projects are going to be realised with the execution of the first construction work. Thus, newly-built facilities will be built, covering a total area of ​​approximately 70,000 m2.

Within the scope of this project which encompasses a large Šibenik investment, Draga is preparing an additional offer of substantial garage space for the market. The design of the necessary solutions for such an offer is already under way with a design bureau from Barcelona in charge of Draga, while one of Zagreb's architectural offices is undertaking the design work for Podsolarsko.

As part of the Draga project, with a planned investment of about 50 million euro, 40,000 m2 of new garage-retail and residential space in the centre of Šibenik is planned. As the design and plan extends where today's city market currently stands, which will require for it to be temporarily relocated to part of today's parking area next to Šibenik bus station, the first phase of this project must be completed within eighteen months of the beginning of construction.

After the realisation of the main part of the project, the second phase is expected to be the construction of apartments and business premises. There will be a modern residential area boasting an impressive 30,000 m2 of living space, the construction of a mini marina for up to 65 boats is also set to take place.

The second phase of the plan involves the construction of hotels with about 250 accommodation units, they'll allegedly be of a high category, and this stands as an investment that cannot be less than 60 million euro, they say.

Sources close to the Zagreb Montaža Grupa say that both Šibenik investment projects have already attracted the interest of potential buyers.

Make sure to stay up to date with our dedicated business page for more information on this Šibenik investment, and much more.

Click here for the original article by Suzana Varosanec for Poslovni Dnevnik

Questions about property in Croatia are common, and while the prices vary dramatically in various regions of the country, with places like Split and Dubrovnik typically dominating, there have been some significant fluctuations.

As Novac.hr/Jutarnji/Iva Novak writes on the 15th of December, 2018, Crozilla.com's data on property in Croatia showed that average prices of advertised houses rose by 0.8 percent in November. When comparing them to apartments, which are still more expensive than houses, the difference was almost 21 percent.

Dubrovnik, with a difference of 10 percent, and Poreč with 2.5 percent, remained, as they did in previous months, rare cities in which houses were more expensive than apartments. The biggest monthly increase was recorded in Dubrovnik, where prices rose 5.8 percent, so the value per square metre in a house, with the price of a garden included, rose to 4,145 euros.

For a square metre of a house in Poreč, an average of 1,911 euros was requested, which is 0.4 percent more than it was during the previous month. The biggest difference in prices during November posted on Crozilla.com in Bjelovar, where houses were more than 44 percent cheaper than apartments, and then in Osijek where the difference was 39 percent, followed by Varaždin, at 36.3 percent.

The average advertised price of houses in Bjelovar was only 434 euros per square metre, which is 0.9 percent less than the month before. In Osijek, their value rose by 1.2 percent, while the price per square metre was only 587 euros. The data also showed that houses in Varaždin increased by 0.6 percent on average, and 713 euros was being asked per square metre.

In Zagreb, house prices were almost 34 percent lower than apartment prices, and the price per square metre advertised was 1,261 euros on average, representing a monthly increase of 0.7 percent. In Slavonski Brod, a 634 euros per square metre of a house was demanded, which is almost 21 percent less than the price of the apartment there.

The value of houses fell by 0.3 percent on the monthly level, as well as in Senj, where they were 25 percent cheaper than apartments, and their average cost was 1,195 euros per square metre. Lower monthly value in the amount of 0.9 percent was recorded in Umag, where 1,877 euros was being requested per square metre for a house, which is 7.8 percent less than the average price of apartments there.

In Opatija, house prices fell by 1.1 percent, and the value of their ''square metres'' dropped to 2,216 euros, which is almost 25 percent less than the advertised apartment price. There was a similar difference in the prices of houses and flats in Šibenik, where the average square metre price in a house averaged 1,529 euros, which is 0.1 percent less than it was during the previous month.

In Zadar, however, houses were about 23 percent cheaper than apartments.

Their monthly values ​​increased by 0.5 percent in November, and the price per square metre, with a garden included, stood at 1,698 euros. The prices of houses in Split rose by 3.8 percent on a monthly basis and reached 2,417 euros per square metre. Housing there during November was about 15 percent cheaper than apartments there were, and such a difference in prices was also recorded in Rijeka, where 1,229 euros per square metre were being demanded, 0.8 percent more than the previous month.

In Pula, according to Crozilla.com, prices on a monthly basis increased by 0.3 percent, so the price per square metre of a house demanded 1,459 euros on average, which is 13.1 percent less than the price of the apartment.

Make sure to follow our dedicated lifestyle page for more information on property in Croatia and much more.

Click here for the original article by Iva Novak for Novac.hr/Jutarnji

It doesn't come as much of a surprise...

The demand for renting flats in this time of the year is on the rise, as well as apartments sales.