Despite all the negative economic trends and earthquakes, the prices of new properties slightly rose in the second half of 2020. According to real estate agent Boro Vujović, the "blame" for this is not solely on APN. Last week, the Agency for Legal Trade and Property Mediation (APN) began subsidizing residential loans for this year, and the Croatian Bureau of Statistics released data on the movements of new apartment prices in the last year. APN will start accepting applications for subsidies on March 29, and those who decide on this model of buying their property will be able to get loans with interest rates of 2.09% to 3.5% in banks. On the other hand, the average price of newly built apartments in Croatia rose by 1.2% in the second half of 2020 compared to the same period in 2019, and in the metropolis, this difference is even more pronounced, with a 5.5% increase. When translated into kuna and euros, the average price of a square meter of a new apartment in Croatia was 12,813 kuna (1,692.60 euros), while in Zagreb it was 14,125 kuna (1,865.92 euros). With the start of the coronavirus pandemic and its aftermath, which were reflected in the decline in BDP, a decrease in tourism, and a lockdown, many expected a drastic drop in property prices. The situation was further exacerbated by the earthquake in Zagreb and Banija, which damaged many residential buildings, causing a decrease in the market. However, instead of the expected decline, a relatively modest rise in prices arrived, and APN's subsidies are partially to blame for this situation. Last year, APN began subsidizing residential loans, which were later repeated, and low interest rates on residential loans contributed to this situation, according to Vujović, owner of the real estate agency Opereta. "The center of Zagreb is no longer attractive due to the earthquake. People are afraid to buy older properties, and in one moment, a good portion of the Zagreb market was lost. The potential for buying has been reduced by 20%, and we still have people who live in this area and want to buy something in about 80% of the apartments located in other parts of the city. On the other hand, we have historically low interest rates on savings, where people do not pay taxes on savings, we have very low interest rates on residential loans, we have the devaluation of money, which happened because a large amount of money was put into circulation. In order for everything to function together, this would need to be done. People buy properties to save value, people buy apartments instead of having money, because money loses value every day. This is one of the reasons. Last year, the APN repeated its subsidies, so this is one of the reasons for this price movement. Despite the corona and the negative pressure on BDP prices, there were more factors that contributed to the rise in prices, as opposed to those that countered them," Vujović explained in an interview with Net.hr. The price remains the same, the offer is different It appears that the coronavirus and the earthquake affected the choice of property more than its price. In the metropolis, new construction is now being sought, and the center is avoided. According to the Croatian Bureau of Statistics data, out of 1,770 new apartments sold last year, 992 found owners in Zagreb. "Not at the moment when the earthquake occurred; people began to think about the quality of construction, and then new construction emerged as something that people consider to be definitely good. There was a demand for new buildings before, but now it is even more emphasized. Before the corona and the earthquake, all properties in the city center were very attractive, both due to tourist rentals and because it was a unique entity of great interest. When the corona hit, followed by the earthquake, the attractiveness of old buildings disappeared or decreased. The periphery became more attractive, as it may be cheaper, and those who previously thought only about the center now found it acceptable and new construction on peripheral locations, because it is now more important to be in a quality building in a less attractive location, rather than in a less quality building in a better location," Vujović noted. He pointed out that the average price of a square meter of an apartment in old construction is around 1800 euros, while the value of residential units in new construction can reach up to 3000 euros, for example in Maksimir or Trešnjevo. However, there are always buyers, but the question is at what price. According to statistical data, in 2020, the difference between the listed and sales prices per square meter of an apartment in the entire country was only 170 kuna, while in Zagreb it was 322 kuna. Vujović noted a difference of five percent between the sought and sales price of real estate, which means that buyers were doing better. "We often have situations where sellers are misled and set prices that are far from reality. These are apartments that are not on the market, it's not about serious sellers. We often say that we have sellers who are selling to sell and to sell, that is, they are engaged in this. In the serious conversation, the difference between the sought and sales prices is around five percent, but again, these are properties where the prices are well set, and there were no major corrections. I agree that there are wild prices in ads, and there are both realistic and unrealistic prices. In this case; a seller on Trešnjevčina says he heard that the average price of a house on Trešnjevina is 2700 euros and he's now building something and putting a price of 3200 euros. Neither is the average price on Trešnjevina 2700, nor is the price of 3200 something that can be achieved on Trešnjevina. However, people often hear what they want to hear," Vujović explained. There is no magic formula He says that he needs a magic formula to predict how property prices will move in the future. On the one hand, the APN factor is present as a factor in the rise in prices, but on the other hand, the moratoria for loans are abolished, and it's unclear how much money will be invested in real estate on our coast. Vujović recalled that in 2019, foreigners were involved in 30% of real estate transactions, and they have stronger purchasing power than domestic residents, which also affected the rise in prices. "It's hard to predict with certainty what will happen. If you go back a year ago, when the corona and the earthquake started, everyone thought everything would collapse, and that's not happened. When you follow economic trends and the decline in BDP, it's realistic to expect a drop in property prices, but the fact is that they haven't dropped. What's important is that prices haven't fallen, but have been at a stable level," Vujović said, the director of Opereta. Many point a finger at APN, accusing it of raising property prices through subsidized loans, but, as Vujović explained, it's not the only factor influencing property prices, and it appears to be far from having any significant impact. At least for now, it is certain that the announced abolition of subsidies in 2023 will not significantly change the situation on the market. "The subsidies will last as long as there is money, and then you want to use the APN. You don't have time; you have a month to find a property, resolve the loan, and have everything ready for the APN subsidy. In a short period, there is great demand, and a small offer. Therefore, the law of the market - prices rise. This was announced a bit early, so buyers have time to prepare. Some have even become used to it and are now ready. The impact of APN was the greatest in the first years, and now, considering the dynamics, it is smaller, or even nonexistent," Vujović believes. Therefore, it seems that it would be best to buy apartments when there is money, as prices should not change significantly. However, it's desirable to look for new buildings or at least objects made of reinforced concrete, preferably outside of areas devastated by the earthquake.

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