The Croatian real estate market in the last two years has continued to see a trend of increasing prices, despite the COVID-19 pandemic and two powerful earthquakes. Prices have risen by 4.05 percent year-over-year for apartments and 7.73 percent year-over-year for houses, a similar trend was also noticeable in comparison with prices from 2019 and 2020. According to an analysis by the online classifieds website Njuškalo published in March, the average desired price per square meter of an apartment in Zagreb is 2297 euros, while the price per square meter of a house is 1441 euros. The most expensive apartments are found in the city center, where sellers are asking for more than 2500 euros per square meter, while apartments for less than 2000 euros per square meter can be found in the outskirts of the city, such as Brezovica, Podsused, and Sesvete. The Director of the real estate agency Opereta, Borislav Vujović, believes that the ongoing inflation will continue to drive up the prices of real estate. In response to the question of whether it is now worthwhile to buy an apartment or rather wait, he says: "That's a million-dollar question". "There is demand, we have APN credits and many apartments are sold through such subsidized credits. Inflation is ongoing, and those who have cash are buying apartments to preserve the value of their money. We still have low interest rates on both savings and loans. With all other parameters, such as the increase in energy prices and general inflation, and the war in Ukraine, the decline in real estate prices is not realistic, namely, we cannot expect a significant decline in real estate prices in the next year. The only thing that can happen is a slowdown in the trend of rising prices., " "Visible is that investors are delaying projects due to unpredictability, lack of materials, but also labor. This will also affect the increase in prices." He is convinced that the prices of real estate will be in line with inflation. Regarding the real estate bubble, he says that this is not currently the case in Croatia, as there is no uncontrolled construction, and whatever has been built and sold is fact. Concerning the price per square and whether they can be overinflated, Vujović points out that there will always be people who have money and are willing to pay a price that may not be realistic, but is determined by demand. Economist Damir Novotny believes that Croatia does not have the right real estate market, that it is very colorful, and that we have both an excess and a shortage of apartments. He emphasizes that the prices of apartments and houses are rising somewhere, falling somewhere, while in certain parts of Croatia, real estate are empty and vacant. In response to the question of why the prices of real estate are rising, he answers that the reason is the lack of new construction and low interest rates on saving, which is why people are investing in real estate. He emphasizes that prices are not rising in some places, for example in Slavonia, just on the Adriatic, and only in some cities. He says that Croatia currently has around 30 percent more housing units than there is demand, especially after the emigration of recent years. " The situation with real estate in Croatia is unsustainable, apartments are unaffordable, and experience has shown that there will not be a resale," he emphasizes. He also commented on APN loans. "These measures have given a boost to the growth of credit prices, and the encouragement of debt is one of the errors in economic policy which, with subsidized credits, has actually encouraged debt. In reality, it should be working on cooling down and stopping demand," Novotny warns. According to the analysis, in the last two years, desired prices for apartments on the coast have risen, with a 11.24 percent increase in Split, where the average price per square meter is 2974 euros, a 12.37 percent increase in Zadar, where it is 2398 euros, a 28.21 percent increase in Rovinj, where it is 3336 euros, and a 6.61 percent decrease in Dubrovnik, where the highest price per square meter is 3575 euros. The desired prices for apartments in Rijeka have risen by 22 percent over the last two years, and the average price per square meter is now 1879 euros, according to Njuškalo analysis. Source: dnevnik.hr

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