The Last Six Years, Real Estate Ads Often Become a Dream of Unaffordable Prices

Over the past six years, leafing through real estate ads often becomes a dream of unaffordable prices due to abnormally high property prices, which skyrocketed nearly 15% in Croatia alone last year. For example, six years ago, you could buy an apartment for 1,000 to 1,200 euros per square meter in any major town in Croatia, but it has become almost unimaginable in recent years, especially last year.

For instance, in Zagreb and other major towns, it's almost impossible to find an apartment or house for less than 2,100 euros per square meter. In coastal towns, where foreign investors are mainly interested, prices are even steeper.

Croatian Real Estate at the Top of the EU in Terms of Price Growth

Experts explain that due to inflation, people's savings returns are low, so they transfer money from savings to real estate to retain its value and also to ensure additional income through rentals. High inflation, high interest rates, ongoing geopolitical turmoil, and the inevitable fear of recession have all contributed to the surge in property prices, which rose by 14.8% in Croatia alone last year.

The situation is not significantly different in the rest of the European Union, where annual price growth in the third quarter was 7.4% on average, excluding Denmark, where prices fell by 2.4%.

The only countries in the EU that recorded price growth similar to Croatia's (2.8%) compared to the previous quarter are Slovakia, Ireland, and Portugal (2.9% and 2.7%, respectively), while France had price growth of 2.7%. The smallest price increases were recorded in Sweden (1.1%). Denmark recorded the largest price drop (3.8%).

Countries with the highest price growth are Estonia (24.2%), followed by Hungary (21%) and Lithuania (19.3%). On the other hand, real estate prices in Sweden, Finland, Romania, Italy, and Germany fell by 3.1%, 1.3%, 1.2%, 0.4%, and 0.4%, respectively.

New Buildings 17.4% More Expensive in the Third Quarter

In Croatia, new construction in the third quarter was 17.4% more expensive than the previous year, while the prices of existing properties rose by 14.5%. In Estonia, which had the highest price growth rate, the price of existing properties in the third quarter of last year rose by almost 30% compared to the same period in 2021.

Prices in Zagreb and the Adriatic Coast Soar

According to DZS data, new construction in the third quarter of last year increased by an average of 2.6% compared to the previous quarter, while the prices of existing properties were 14.5% higher than the previous year. Prices of existing real estate objects increased by 2.9% on a quarterly balance, and 14.5% on an annual basis.

“Real Prices Won't Suddenly Stop Growing"

BBC and Boro Vojović, a real estate expert and owner of Opereta, note that despite the euro adoption, nothing has changed yet, as the price increase has already been taken into account in the current prices.

"It's Unrealistic to Expect Prices to Drop"

Hrvoje Travnikar, a financial expert, points out that there were no exaggerated differences in credit before New Year's and after, with the real estate credit cycle continuing.

Meanwhile, Zoran Đurić, director of Opereta, says that the prices will not drop, but rather stabilize. "It's unrealistic to expect prices to suddenly stop growing."

"It's Unlikely to See a Significant Drop in Prices"

Jelena Kravoščanec Todorović, director of Opereta, says that it's unlikely to see a significant drop in prices and that the current situation is far from the end of the real estate market.

"The Demand for Real Estate Far Exceeds Supply"

Kravoščanec Todorović says that the demand for real estate is still strong, with prices rising in the first quarter of this year. She points out that the demand for new buildings is particularly high, with strasners preferring them over existing ones.

Credit Rates Slowing Down the Real Estate Market in Germany.

However, the situation on a European scale is different, with Germany's real estate market experiencing a significant slowdown due to high credit rates. The country's real estate market has seen a 50% decline in transactions in the fourth quarter, according to BNP Paribas data.

"It's Unrealistic to Expect Prices to Keep Rising"

However, Kravoščanec Todorović notes that it's unrealistic to expect prices to keep rising, considering the high credit rates and the current economic situation. She believes that the prices will stabilize and may even drop in the long run.

The New Year Will Bring New Challenges

The new year is expected to bring new challenges for investors and buyers, with European banks and central banks playing a key role in shaping the real estate market. The Bank of England has just published its outlook, predicting a 10% drop in property prices over the next 18 months, while the European Central Bank is under pressure to raise interest rates to combat inflation.

The Market Will Take Time to Reach a New Normal

According to Bloomberg, the European real estate market will take time to reach a new normal, with prices dropping and transactions slowing down. However, experts believe that the market will eventually recover and that prices will stabilize.

A European Real Estate Reversal Has Begun

Europa se sprema za nagli pad vrijednosti nekretnina, što ima za posljedicu i neke previrnja. Od Londona do Frankfurta, ulagači pokušavaju pronaći način za izvlačenje iz nestabilne situacije, piše Bloomberg.

Ogromni dugovi i kriza u nekretninama

Zajmovi, obveznice i drugi dugovi u ukupnom iznosu od oko 1,9 bilijuna eura - što je gotovo veličina talijanskog gospodarstva - osigurani su komercijalnom imovinom ili su prošireni na stanodavce u Europi i Ujedinjenom Kraljevstvu, prema Europskom nadzornom tijelu za bankarstvo.

Posljedice krize iz 2008.

Nakon financijske krize 2008. većina banaka nije bila voljna opozvati loše zajmove jer bi to dovelo do velikih gubitaka - ta je praksa nazvana "produži i pretvaraj se". Prema novim pravilima o nenaplativim zajmovima, zajmodavci će morati rezervirati očekivane, a ne nagomilane gubitke. To znači da imaju manje poticaja mirno sjediti i nadati se oporavku vrijednosti imovine.

Brojne zemlje u krizi

Švedska je do sada bila epicentar krize, s predviđanjima da će cijene kuća pasti 20 posto u odnosu na vrhunac. Nekretninske kompanije izgubile su 30 posto svoje vrijednosti u prošlih 12 mjeseci, a švedska središnja banka i financijsko nadzorno tijelo opetovano su upozoravali na rizika koji proizlaze iz duga komercijalne imovine.

"Domino efekt"

Moglo bi doći do "domino efekta" budući da bi zahtjevi za više kolaterala mogli izazvati nepovoljnu prodaju, što bi moglo biti vrlo pogubno za taj sektor.

Nova opcija za ulagače

Opcije dostupne za ulagače u nekretnine raste. Subjekti kao što su zatvoreni kreditni fondovi stalno se širili u prošlom desetljeću. Osiguravatelji i drugi alternativni zajmodavci imali su veći udio novih britanskih zajmova za nekretnine od velikih banaka u zemlji u prvoj polovici prošle godine, prema Bayesovoj anketi.

"Svatko tko smisli kreativan način popunjavanja te praznine, dobro će se zabaviti"

Rješenje će biti relativno uredno, a njega će voditi širok niz kompanija uključujući velike banke i alternativne zajmodavce. Ta će grupa, ovisno o okolnostima, riješiti krizne situacije znatno bolje nego u prošlosti.

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