Approximately 25,000 residential properties are sold in Croatia each year, with foreign buyers making up 10% of purchases. The Adriatic and Zagreb are the fastest-growing areas.

Long recession

Official Croatian statistics show that, on average, house prices rose by 3.8% in the country last year, with the rise being more pronounced at the end of the year and exceeding 7% annually, almost like in the pre-crisis periods. Prices for older homes rose more than those for new ones, whose square meter falls between 9,000 and 12,000 kunas. The mentioned increase represents a significant step forward for the Croatian real estate market, which is recovering from a long recession at a slow pace. The averages conceal large regional differences, with property values in tourist resorts, coastal towns, and to a lesser extent in Zagreb. In the context of Central Europe, Croatia is perceived as a state with acceptable real estate prices, which are still 15% lower than in the pre-crisis period in 2008. Analysts are hoping that the recovery of the real estate market will be sustained, and among neighboring countries, only Italy has yet to stop the sixth consecutive six-year drop in property values. Last year, Czech real estate prices soared by 11.7%, in Hungary by 8.5%, in Slovenia by 8%, and in Slovakia by 5.9%, according to RBA analysts. The current value of real estate in the Czech Republic and Hungary has exceeded levels from 2008, while Slovakia is still 2% below, and the Slovenian real estate market, with a lag of around 14%, stands similarly to Croatia.

Subsidies will continue

According to the data of the real estate agency Global Property Guide, the average sought price of a 60-square-meter apartment in Zagreb is slightly below 2,000 euros, unlike in Prague city center, where owners demand around 3,700 euros per square meter, or Bratislava, around 2,500 euros per square meter. Elit apartments in Ljubljana are sold for around 3,200 euros per square meter, but Slovenian media report that a flat can be bought in the capital city for around 2,200 euros per square meter. House prices are linked to the purchasing power of citizens, wage movements, and interest rates, and last year's rise in Croatia were also influenced by state-subsidized mortgages for buying the first home or house. Official statistics show that significant growth on an annual basis was registered in Zagreb (9.8%) and the Adriatic (7.2%), while in other parts, growth was modest (4.1%). The rise in prices for the second year in a row may be a good indicator pointing to the start of the construction sector's recovery. Positive growth rates are also recorded by the physical indicators in the construction sector, the number of approved construction permits, and the volume of construction works index, according to RBA analysts. Subsidized mortgages are being prepared for this year as well, but buyers of real estate in less developed areas would have a preference for state subsidies.

Source: vecernji.hr

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