The real estate market is slowly recovering.

The real estate market is recovering, but this is not a satisfying pace. The growth is gradually increasing, but prices are still 15.6% lower than the pre-crisis level. However, we can be optimistic because the current macroeconomic environment is conducive. Gross Domestic Product growth is followed by wage growth, interest rates on loans are falling, construction activity is growing, and so is the supply of new properties," said HGK deputy head Josip Zaher at the 30th Real Estate Business Forum organized by HGK on Monday. Presenting the current state of the real estate market, State Secretary at the Ministry of Construction and Physical Planning Željko Uhlir emphasized that house prices are in correlation with BDP movements in most cases. "Changes in the economy in general determine trends on the real estate market, so our economy's growth in the last few years is reflected in real estate price growth and the number of issued building permits. The elasticity of housing supply to price growth in Croatia is high, which indicates the health of the market," Uhlir evaluated. Uhlir warns that the lack of labor force in construction also affects production costs, and ultimately, house prices. "I fear we're delaying our adaptation to labor market trends," Uhlir said. Damjan Geber from Brigada explained how gentrification of neighborhoods affects real estate prices. "Today, some of the most expensive neighborhoods in the world are those we used to consider dangerous and peripheral just a few decades ago. This gentrification process, which essentially means the arrival of people with more money in a given neighborhood, changing the entire neighborhood landscape, will be even faster in the future. Such changes offer immense investment potential," Geber said. Gentrification can be tracked by opening new restaurants and cafes, so the opening of a Starbucks in a neighborhood can increase prices by 0.5%. So, in the notorious New York neighborhood of Williamsburg, real estate prices have risen by 180% in 8 years. Zagreb's Trešnjevka is portrayed as a negative example of gentrification, as the neighborhood lacks good infrastructure, whereas Sigećica is cited as a positive example.

Uhlir points out that the lack of labor force in construction also affects production costs, and ultimately, house prices. "I fear we're delaying our adaptation to labor market trends," Uhlir said.

About us

Information

Services

About us

Information

Services