SUBSIDIZING HOUSING CREDITS IN 2020. 2017-2019 Review. The housing credit subsidy program, which has been implemented since 2017, according to the announcements of the Ministry of Construction and Spatial Planning, has been used by 9,409 citizens, with an average age of 34.

	2017.*	2018.**	2019. ***
Approved applications	2,307	2,948	4,154
Average age of beneficiaries	35	34	33
Average credit amount	67,500 EUR	66,600 EUR	69,500 EUR
Average credit repayment period	20 years	21 years	21 years
Average apartment size	69 m2	68 m2	72 m2
Average apartment price	1,160 EUR/m2	1,235 EUR/m2	1,280 EUR/m2

* Agency for Real Estate and Property Mediation, Implementation of Housing Credit Subsidization for Applications Received in 2017. ** Agency for Real Estate and Property Mediation, Implementation of Housing Credit Subsidization for Applications Received in 2018. *** Ministry of Construction and Spatial Planning website Subsidy in 2020 – one or two rounds? Applications in 2020 were accepted from March 30 to April 30, when 3,681 requests were received. According to the announcement of the mentioned Ministry, the Agency for Real Estate and Property Mediation (APN) processed all incoming requests. 3,573 requests were approved, 76 requests were requested to be supplemented, and 15 were rejected. 17 applicants withdrew their requests. On the Ministry of Construction and Spatial Planning's website in April, a second round of housing credit subsidies was announced, scheduled for September of this year. The latest announcements do not mention this possibility. Market Research on New Round of Subsidized Housing Credits Agency Opereta Property d.o.o. conducted a survey to gather information on whether clients are aware of the Housing Credit Subsidization Program:

84.8% of respondents are familiar with the Housing Credit Subsidization Program
67.3% of respondents are aware of the announcement of a new round of housing credit subsidies in September 2020.
67.3% of respondents are interested in purchasing a property with the Housing Credit Subsidization Program
62.6% of respondents buy a property regardless of the program being implemented

This survey indicates high client awareness of the Housing Credit Subsidization Program as well as the announcement of a new round in September of this year. High interest among citizens to take advantage of this Program is also expressed. We recall that the Law on Housing Credit Subsidization has limited the application of this Program to December 31, 2020. If a public call is announced in September of this year, it will be the last call according to the provisions of the mentioned Law. Otherwise, citizens who did not use the call in April 2020 will not have the opportunity to obtain a subsidy on a housing loan. Housing Loan Conditions – Are Banks Ready? Banks continue to intensively work on completing or paying off subsidized housing loans and currently do not have prepared conditions for a new round of subsidies. Following the announcement of a public call by APN for credit institutions (banks) to participate in the implementation of the Program, banks will prepare loan conditions that represent a business secret until the signing of a Cooperation Agreement with APN. All banks participating in this Program will strive to attract customers with a lower interest rate, without a fee for loan processing, a bank-valued property assessment, various discounts, and insurance contract benefits. Banks will offer loans in EUR and kunas, with the option of choosing monthly annuities or installments. The biggest challenge for citizens will be determining creditworthiness, considering that banks have tightened the conditions for determining creditworthiness. For example:

do not include employment supplements in creditworthiness, such as a work-related supplement and a transportation allowance
do not approve housing loans for clients of other banks, but only for their own clients (who have client status)

And while the loan amount and assessed property value could be 1:1 before, in some banks, the loan amount cannot exceed 70% of the assessed property value. Martina Mataić Škugor Director of Opereta Investments d.o.o.

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