The State Bureau of Statistics announced that property prices in the first three months of this year increased by 9.1%. Surprising data, says the founder and director of Opereta and deputy chairman of the Real Estate Chamber at the Croatian Chamber of Commerce Boro Vujović, as the actual data is somewhat lagging behind expectations. They have slightly increased, but not by that much.

House prices in Croatia in the first quarter of this year rose, on average, by 1.7% compared to the previous quarter, while the annual growth rate of prices reached 9.1%, according to data released by the State Bureau of Statistics (DZS). In Zagreb, residents have seen price increases of 1.8% compared to the previous quarter, while on an annual basis, the price has risen by 8.8%, according to statistical data published on Thursday. “These data have really caught me off guard. When you compare the same period last year, prices are actually almost the same.” When talking about house prices in Zagreb, although according to our data we are recording a slight increase in prices, which varies depending on the type of property and its condition, this percentage is much lower than the mentioned 9%, ”explained Boro Vujović, founder and director of the real estate agency Opereta. According to our statistics, he emphasizes, property sales in the first five months of this year are weaker by 20% compared to the same period last year. The main reason for this, he explains, is that unlike last year, there was no tender for subsidized housing loans by the Agency for Legal Transactions and Property Mediation (APN). These loans have significantly shaped the dynamics of the market. “When there was high inflation, people were buying non-selectively, they were afraid and chose investment in real estate as the best way to save money. Now the inflation is slowing down,” Vujović analyzes the situation on the market, adding that in the meantime, sales in his company have returned to last year's level.

Clash between expectations and reality

Demand still exists, while supply still does not, so prices remain high. However, he repeats, they have remained as they were at the end of last year, and due to the gap between expected and real prices, corrections continue in the purchase and sale processes. According to Opereta statistics, the average difference between the selling price and the desired price is between 7 and 8%. Sellers of used houses, reading media announcements, have created unrealistic expectations about the value of their property. On the other hand, buyers read that house prices will drop. All these expectations are corrected in the process of selling a property, he explains. The imbalance between supply and demand is becoming even greater. Demand does not dwindle, but building new residential buildings has become more expensive. More and more, the lack of labor force has an impact. Vujović recounts how his company is looking for a contractor and they were unable to find anyone who could begin construction before spring.

Cities that were not on the map

In Zagreb, there is a demand for all types of houses. The most sought-after are smaller houses with tram lines. There are the fewest of them on the market. However, the demand for houses, apartments and building plots in the city and its surroundings is becoming stronger. At present, the statistics are such that in Zagreb, one such house is sold on five apartments, but lower prices per square meter, a quieter atmosphere, and accessibility to infrastructure are advantages that are hard to ignore. In the Zagreb County, the number of sold houses was more than double the number of apartments sold last year in the first quarter, while this year numbers of sold houses and apartments were roughly the same. “Among the attractive locations, cities that were not on this map before are now appearing. These are mostly cities in the Zagreb County, Zabok, and Sisak, whose road connection has only recently been finalized,” Vujović explains, who has been trading in real estate in the last twenty years. As for other changes on the real estate market, a notable decrease in the number of buyers from Germany and Austria, especially in Istria, is observable. This is the greatest blow to the sale of property over half a million euros. Luxury properties in Zagreb, which are the most resilient to the crisis, still have a loyal and targeted audience. Vujović is optimistic despite lower numbers of transactions at the beginning of the year, hoping that Opereta will achieve results on the level of last year when, according to Fine data, they operated with a revenue of 3.8 million euros and 531 thousand euros profit. Taken from: forbes.n1info.hr

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