Tica: The first lesson from the textbook of the real estate market reads: Do not share subsidized mortgage loans because you will get expensive and small apartments as a result. The state has decided to stick to its own mistakes.

After the record-breaking number of apartments sold in September, thanks to the deadlines for subsidized loans, the market has been stagnant since October, and we currently have a deep gap between the prices of what is being sought and what buyers are willing to pay. The quiet period is expected to continue until March, by which time the state has announced a new round of subsidies for APN, which will further drive up the prices of apartments, which owners do not like, and will force APN users to buy small and expensive apartments. The practice that the state has been persistently pursuing, allegedly to reduce youth migration, is in direct contradiction to the fundamental principles of every profession involved in the process, from construction to banking and economics, and does not benefit anyone except for the real estate speculators. Developing a long-term rental market is the only direction in which housing policy should be heading, agreed the participants in the Rexpo investment conference panel.

"Bought by unbelievable prices in September, everything that had a property deed and a usage permit could be sold. We were amazed when an old apartment in Trnje was announced for sale at 2,400 euros per square meter, and it was even sold. The huge gap between the prices being sought and sold prices has been created by the subsidies, and the market has become stagnant. Those taking out loans are waiting for March, when the same chaos is expected, and the situation is not good for anyone - neither for buyers, nor for agencies, nor for banks, which risk not being able to repay the mortgages for these expensive apartments," explained Borislav Vujović, deputy chairman of the Association of Real Estate Professionals at HGK, the current situation on the market caused by APN.

Josip Tica,

regular professor at the Department of Macroeconomics and Economic Development at the Zagreb University's Faculty of Economics believes that the exemption from the property purchase tax was a significantly better measure than the subsidized loans with deadlines for tenders, which have been rocking the market.

"The first lesson from the textbook of the real estate market reads: Do not share subsidized mortgage loans because you will get expensive and small apartments as a result. The Croatian state has decided to stick to its own mistakes. Furthermore, just because someone has decided to act according to a deadline and a schedule, we have a six-month gap that has been replaced with a period of wild price increases. Every one of my students knows that such measures, if anyone has decided to act, should not be announced because they leave all the participants on the market without business for six months. It is all amateurish and lacks an understanding of the profession," Tica said. Additionally, the price of apartments is no longer determined by their quality or location, which means that investors have no interest in building high-quality apartments, but rather engage in the production of cheap mass housing, which is also a path to the collapse of the market, as well as the media campaign promoting the rise in the price of square meters. Luka Kaić, owner of Domograda, notes that over the past three years, the price of land in Zagreb has increased by 50 percent, which has also driven up the price of residential square meters. "When the price of land was 200 euros per square meter, we could sell new construction at 1600 euros per square meter. Today, when the price of land is 300 euros, we cannot sell it below 1850 euros. Furthermore, the cost of labor has significantly increased, as we do not have enough people," Kaić emphasizes. Responding to speculation that the rise in real estate prices and APN has benefited investors, Kaić points out that subsidized loans can only be used for renovations, as the condition for receiving a loan is a property deed and a usage permit. Therefore, the situation only benefits speculators, and young families are forced to buy old apartments at a higher price. Tica also pointed out the gap between interest rates for savings and loans, which forces citizens who have 'extra' money to keep it on their current accounts or invest it in real estate, mostly with the intention of short-term rental, which is not a long-term solution. Those who do not have the cash to buy an apartment and do not have their housing situation resolved, the government's measures, from POS to APN, force them to take out loans, although only 30 percent of Croatians are capable of repaying a mortgage. There is no solution for them, as there is no long-term rental market, which would not only resolve the problems of young families but also stabilize the entire real estate market, the participants agreed. source: poslovni.hr

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