On the first day of the application for state subsidies for housing loans, 106 requests arrived. There were no crowds in APN, and those who want the state to help them cover 30 to 51 percent of the loan in the first five years - have two more weeks to submit.

However, real estate experts, as well as demographers, are not enthusiastic: they say the idea is good for a certain number of young people but subsidies also cause an increase in the prices of properties, and it's hard to prevent young people from leaving with such loans.

Iva Novaković, 36, decided to replace her sublease with a home of her own and after going through a few hellish rounds while looking for an apartment in Zagreb. Soon, she will submit an application for a state subsidy for a housing loan because she can get 30 percent for five years.

106 applications arrived on the first day of submitting requests for subsidies at APN.

The interest, however, appears to be smaller than last year. There are no crowds for subsidies for loans offered by 12 banks with interest rates ranging from 3.12 to 3.75%.

"There are no crowds because we said the competition would be open for at least two weeks, to guarantee that everyone who submits a valid application and has documentation will certainly get a subsidy, we have well planned and secured enough funds," says Predrag Štromar, Minister of Construction and Spatial Planning.

Measure that causes chaos in the property market

However, two weeks is not a long enough period and causes chaos in the market, say real estate experts. Buyers are in danger of overpaying apartments - because the time is limited, there are not many existing apartments, demand is high and so prices rise.

They do not agree with the minister's claim that the higher prices of properties are the result of the growth of the BDP and wages. Last year, they say, the main trigger were subsidies.

"What we had before APN was a gap because people were waiting for APN, now we have APN - three, four, five, and what's next? We have high prices, the question is whether someone who doesn't need APN paid it, that's the thing, this is a short-term measure, if it lasted all year then there wouldn't be a problem, but if something lasts 15 days, that's a short-term measure," says Borislav Vujović, Vice-president of the Real Estate Business Association of HGK.

40 million kuna is secured for this year's subsidies, the amount of which has been graduated from 30 to 51% this year. Depending on the development index of the place where the apartment is bought. The lower the place's development, the higher the subsidy. Furthermore, for every born or adopted child, the subsidies will be extended by two years.

However, demographer Marin Strmota is not impressed.

"This measure seems, to me, also unsystematic, isolated, small, more political because 40 million kuna are primarily small funds and will not resolve the systematic problem of the unsettled property market," says Strmota.

"If we are going to go for regional development, practically, we should go up to 100% subsidies for less developed regions and leave this as is and not reduce the existing ones," says Strmota.

Minister Štromar, who emphasizes that subsidies help numerous young people up to 45 years old who are neither owners of a home nor a property, expects a response similar to last year, around 2,000 requests.

Source: N1

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