It's likely that we will have fewer foreigners buying property in Croatia next year, Boro Vujović said

A new year brings numerous news for Croatian citizens. In a large Net.hr special 'What awaits us in 2024', every day we will publish changes that are coming.

Many citizens in Croatia still have not solved their housing problem, they live as tenants. Prices are high, interest rates are rising and it's hard to decide to buy real estate. On the other hand, those who sell, especially old apartments, have increased prices. Uncertainty among citizens is growing... considering inflation that is literally "eating" the monthly wage. Is there hope that a drastic change will occur on the real estate market...

Boro Vujović, the founder and director of the company Opereta, says that there is one characteristic that has been recorded throughout 2023. "We have a gentle decrease in traffic compared to last year, while we have a gentle increase in prices, almost, if not a record. We will see it now at the end. Maybe it will be higher than last year. We have a smaller number of transactions regarding foreigners. We have that it was the last year when we had APN in this form, which has been so far. We have that it was the first year of Schengen and the euro, which also had an effect on the situation on the real estate market," he said.

But that's not all. Vujović says that we have high inflation that is still present and a change in interest rates. "We have rising interest rates, the first significant rise in several years, and the appearance of competition for real estate in the form of investments, and in the rise of interest rates on savings, and in government bonds as one of the forms of investment".

The rise in prices has shifted to areas beyond Zagreb and the coast

When we talk about some rise in prices, Vujović emphasizes that it primarily refers to apartments, to be more precise, residential real estate, which can also include houses, and especially when we are talking about the coast, where they make up a significant portfolio in the sale-purchase mass. "As for business spaces, their prices did not rise as much as it did with residential spaces. When we talk about the rise in prices, we primarily think of residential spaces and primarily of Zagreb and the coast," he added.

But, Vujović says that now it has started to be transferred to Osijek, Čakovec, Varaždin … to some other parts of Croatia that were previously neglected in some way. "In certain parts that are not Zagreb or the coast, we have started to see rising demand and prices," he said.

Construction land is also attractive. "The number of sales has increased in response to building permits, which is for investment construction, and what is for personal needs," Vujović said.

Always apartments have the largest number of sales in absolute terms and demand is the greatest, but when we have land there is interest that exceeds the offer," he said, adding that the same is true for houses, for all those types of residential property and potential residential property, demand is greater than supply.

What awaits us in 2024

"It's real that in the outside world it's visible that there is a recession on the market, primarily it is manifested, on our most important markets, Germany and Austria where the sale has decreased drastically, by over 50 percent, but prices have not corrected drastically, maybe by 5-10 percent. And there are high interest rates, higher than ours, but they were once twice as low. When ours were low, theirs were twice as low," Vujović said.

"Our economic activities related to the reconstruction of earthquake damage have a situation where the construction is working, and we know that construction is somehow the basis of the economy. Now our construction industry is operating, will work just because of the earthquake damage. We have the tourist season, I hope so next year too, so what we see now is that interest rates are rising. I'm not sure now if they will rise further, and if they will, they shouldn't rise much, so it's certain that in the upcoming year there will be a further decrease in the number of sales. It's likely that we will have fewer foreigners buying property in Croatia next year. And what I'm thinking now, is that we have reached some maximums,"

Corrections on secondary real estate

"Many people are hoping for some price adjustments. It's possible that there will be adjustments, but not of the entire market, but of some real estate, especially secondary ones, which are currently overvalued due to high demand, low supply and people who are willing to pay any price to invest in real estate and are willing to pay some amounts that are not very realistic. Such situations will be less frequent in the upcoming period and next year. That means some stability on the real estate market, in terms of price, at least," Vujović explained.

But, Vujović says it won't repeat 2009 when we had first a collapse of investors who didn't sell because of bad strategy, on the other hand, we had the factor of the 'Swiss franc' and economic crisis and unemployment where we had a huge pressure of people who had bought apartments to sell them because they couldn't finance their loans because they were in trouble.

"You have a small apartment and you buy a big one. You set a price of 4000 euros per square meter. You can't sell it, you can only sell it for 3500 euros. But you won't sell it for 3500 because you don't have what to buy and then you won't do anything. That's why a big drastic fall in prices that many people hope for won't happen because there's no need for it. Now, you'll sell and go on your way, you can't buy anything. So, there will be some corrections, but not global, and not so big," Vujović concluded. Taken from: net.hr

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