Boro Vujović, director of Opereta's non-performing assets agency, was a guest on N1's Dnevnik where he spoke about the reasons for the growth of real estate prices in Croatia and forecasts for the upcoming period. How much the rise in real estate prices affected the rise in construction materials, Boro Vujović explains: "The fact is that there is an interest in real estate. Something unexpected happened – the corona was supposed to bring about a negative correction of prices, but they started to rise positively, i.e. they became more expensive. One of the reasons is inflation, i.e. the fact that countries have released a large amount of money into circulation, and some people who have means are looking to save the value of their money and buy real estate, and the price of construction materials is also rising. This year there was an increase of between 25 and 30% and this will affect the price per square meter in the next period." He says that it is not possible to predict up to what point prices will rise, that will ultimately be determined by the purchasing power of citizens. "It can happen that the price of materials will rise, but the purchasing power of citizens will not. Prices can rise up to a point where citizens can buy real estate. If prices rise too much and citizens cannot follow, then we will have a standstill on the market which is already slowly visible. APN was a big generator of demand in September, now it's not there and it's visible that demand is smaller than last year. Prices can rise, but they cannot go to heaven because then the question is who will buy these real estate?"

Interested parties

He emphasizes that foreigners are especially interested in real estate on the coast: "Every year, about 30% of all purchases are made by foreigners. There is interest, especially after the corona and the situation where people can work from home. There is a big interest in real estate on the coast and in that context, real estate prices in Croatia are cheap compared to Germany, Austria and Slovenia. The interest of foreigners in real estate on the coast has increased." He adds that luxury real estate is doing better: "In the last period, it has become visible that the more luxurious the real estate is, the better it is doing and it is easier to sell. There are not many such buyers, but for some people, money is not a problem. Ordinary value real estate is the most represented, but there is a greater demand for luxury real estate than before, but its market share is still small in comparison to the overall turnover."

The best performing lease properties are luxury ones

As for rentals, luxury real estate and luxury boats are doing the best, Boro Vujović emphasizes. "The more luxurious the real estate is, the greater the interest and it is harder to find such a free real estate, even though there is no free bed on the coast now," he says, adding that there is an increasing interest in the hinterland: "There is an increasing interest in the hinterland, especially in Istria. It will be easier to rent a house with a pool 15 km from the sea than an apartment 15 meters from the sea. Foreigners want intimacy, isolation and not to be mixed with a large number of people, which has changed from the corona." Source: N1

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