Many have realized after the 2009 real estate crisis that it's a bad investment to buy a property of poor quality at a poor location

Availability of information, quality of construction, ownership relationships, loan conditions, proximity to necessary facilities, and property prices... all affect the behavior of market participants. Over the past 10-15 years, we've had a very turbulent and interesting real estate market in Croatia, which has only recently emerged from a long-term negative cycle, but is now facing new challenges. In addition to the well-known shortage of long-term housing care strategies for the population and a lack of investment in infrastructure, transportation, and public facilities, the market in recent years has been affected by apartmentization, subsidies, unjustified increases in property prices, and even restrictive loan conditions, as well as the pandemic... How has all of this affected buyers, changed their thoughts, needs, and compromises, we discuss this with Lana Mihaljinac Knežević from the Zagreb West agency and Robert Pokrovac from the Erste Real Estate agency. Many have realized after the 2009 real estate crisis that it's a bad investment to buy a property of poor quality at a poor location. What everyone is trying to achieve is a quality property at a location near facilities and public transportation. The legality of the building is extremely important, as is the existence of a usage permit, because banks no longer grant loans if the buyer does not attach that document, even if the buildings were constructed before '68. The condition of the building has become extremely important for buyers. They avoid abandoned buildings with disorganized common areas. They are also interested in whether the maintenance is regularly paid and the relationships between co-owners - says L. Mihaljinac Knežević and adds that buyers are no longer rushing and are looking at every detail, such as the quality of construction, energy efficiency, possibilities of long-term revenue, and liquidity. OPERATING MODEL Pokrovac, on the other hand, emphasizes the use of the property itself. - Young married couples are more interested in the infrastructure needed for their children and public transportation to their workplaces than, for example, retirees. However, it is quality that will be given more by the development of classical infrastructure rather than anything else. For years, we have been repeating that new roads, schools, daycare centers, public transportation stations will make that segmentation sensible, and our properties more valuable. The question is whether we have made significant progress compared to some past time. Buyers will change more only when those criteria are raised to a higher level - he notes. He adds that it is indeed difficult to find a property that meets all the desired criteria of buyers, so everyone should think whether they will agree to less square meters and proximity to facilities that make life better or will they, on the other hand, buy a larger property where life will be more comfortable, but they will have to spend more time and money on other, more distant activities. Generally speaking, the internet has changed the way of doing business, making it easier for buyers to get to know the offer better and faster. - Buyers can easily see where the property is located without leaving their office or home, and what all that micro-location has to offer. They can make it easier to decide whether they will view the property or not - says Pokrovac. However, when browsing search engines, they get an unrealistic picture of over-high desired prices. The multiplex nature of the Croatian real estate market and the inadequate speed of response of owners and sellers to macroeconomic indicators is a great challenge for both buyers and real estate agencies, which, despite insight into realized prices and understanding of trends influencing property prices, still have a lack of number of properties with a good ratio of price and quality - says L. Mihaljinac Knežević. Pokrovac agrees, emphasizing that the imbalance in the ratio of new and old buildings on the market is increasingly pronounced. - Statistical indicators of average desired prices for residential properties are still growing, although all indicators show that they should not. It is precisely there that the greatest potential danger and challenge lies. On the other hand, it is easy to fall into incorrect interpretations of statistical indicators and conclude that prices will generally fall, which is far from the truth. In the upcoming period, the challenge for real estate agencies is to influence the adequate formation of desired prices for older properties. I believe that this will soon become clear in the increased overall volume of sales - he emphasizes. Although some agencies are introducing virtual tours, buyers still visit properties in a greater number, which is, in fact, the final step before making a decision to buy.

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