The trend of property price growth is not sustainable and will more depend on global movements than Croatia's entry to the eurozone and Schengen.

The 34th Real Estate Business Forum was held in Zagreb, organized by the Croatian Chamber of Economy (HGK) and the Association for the Sale of Real Estate at HGK, bringing together over 700 HGK members. The real estate market, despite a steady growth, is under a special increase in view of the announcement of slowing down economic activities. One of the key goals of the profession is to mitigate the consequences of a potential market slowdown caused by unfavorable economic movements. This year's Forum was focused, among other things, on educating intermediaries and strengthening the quality of intermediary services, as well as a better-quality relationship with customers. "The role of the HGK is to inform and educate its members through its Associations about new developments and trends in the organization and development of the domestic market. Today, the HGK Association for the Sale of Real Estate has brought together key representatives of this sector with current topics related to the real estate market in 2022, a year that marked changed conditions for doing business and the completion of the EUR introduction. The prerequisite for a successful and quality market is the organization of the market, reducing illegal activity, and we are calling on the inspection of intermediaries to be verified in the Registry of Real Estate Intermediaries, which is maintained by the HGK as a publicly disclosed list issued by the Ministry of Economy on the fulfillment of conditions for intermediation in the real estate market," said Josip Zaher, adviser to the President of the HGK for trade. At the Forum, the dynamics of the real estate market and economic predictions for the upcoming period, and other important topics for the profession were discussed. The Croatian real estate market, upon entry into the Schengen and euro zone, will no longer depend exclusively on local movements; rather, global flows will increasingly affect prices, although such factors are not decisive, says the President of the Association for the Sale of Real Estate at HGK Dubravko Ranilović. "It's necessary to warn that the very fact of introducing the euro and entry into the Schengen space will not be determinant for market growth, but rather economic circumstances, both in Croatia and globally, as was the case when other members introduced the euro as their currency, and when Croatia joined the EU. Contrary to expectations of most, market trends remained downward-looking in these circumstances, as economic circumstances have been unfavorable, with rising interest rates on loans, and the market slowing down," Ranilović said, adding that the real estate business is cyclic and has shown that trends have changed approximately every seven to eight years in recent history. For example, the cycle of decline began with the 2008 financial crisis, and then the market woke up around 2015. One of the main reasons for the expressed 15% year-on-year growth in property prices is record-high inflation, which was partly caused by measures to increase consumption during the pandemic. With such high inflation, it is clear that investors are investing in real estate that will retain the value of the invested money through price growth, it was emphasized at the Forum. There is a significant difference between the coastline and the continent in Croatia due to the high demand of foreign investors with high purchasing power. According to an analysis prepared by the Zagreb Economics Institute in cooperation with the Ministry of Spatial Planning, Construction and State Property, in the real estate business last year, 30% more sale-purchase transactions were achieved than in 2020, with real estate also including agricultural and construction land in addition to apartments and houses. At the Forum, it was concluded that the current trend of growth is not sustainable as general market prices have become too high, and it is now felt that sales are slowing down, or rather, demand is decreasing, as well as the growing difference between desired and realized prices. Taken from: Poslovni.hr

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