Koronavirus and Earthquake Will Leave Significant Impact on Zagreb's Real Estate Market

Boro Vujović, owner of Opéra, the largest Zagreb agency, is confident that this is the end of the trend of rising prices, and a more significant drop is forecasted for old apartments in the city center.

The market has stabilized and is waiting. Both sellers and buyers have put the whole story on hold. Last week, the number of inquiries from potential buyers was between 70 to 75% lower than the usual number. This has not yet led to a drop in prices as everything is still.

What awaits us in the future, we still cannot dare to forecast. One thing is sure, though – the price growth that has been constant for the past three years will be stopped.

Everything depends on how long the extraordinary state due to the epidemic lasts. If it prolongs, the consequences will be harsh for the real estate market,' Vujović emphasized.

The earthquake and the great damage it has caused to older buildings in the city center will significantly lower the prices of apartments in buildings that were constructed without seismic studies, he is convinced.

For a long time now, experts, architects, and seismologists have been warning that buildings constructed over 100 years ago cannot withstand a stronger earthquake. Today this has been confirmed. I expect that the owners of apartments in such buildings will adjust their demands. Until now, under 2000 euros per square meter in Donji grad, you could not buy anything, not even in poor or good condition.'

Additionally, he adds, there were a lot of such apartments available for short-term rental. Because of the coronavirus, tourism has come to a halt, and the question is when it will revitalize. Vujović expects that these apartments will end up on the market, which will further affect the price.

He welcomes the decision of the Minister of Construction and Spatial Planning, Predrag Štromar, to continue the program of subsidized housing loans through the Agency for Legal Transactions and Real Estate Mediation (APN).

A lot of people have signed up for extended agreements, given mortgages, and they already have their pre-approved loan. It is thus important that the program continues. Another tranche has been announced for September, and we will see how things will develop.

He recalls that Opéra, but also the Real Estate Business Association within the Croatian Chamber of Commerce, were until now very critical of government subsidies for housing loans.

Yes. Because these subsidies have influenced the price growth. See how everything is relative. In new circumstances, it seems that we will become big supporters of APN.

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