Property sales in Croatia decreased last year compared to 2019, but the value of sold properties increased despite the coronavirus crisis.

According to the analysis of the property market in Croatia in 2020, carried out by the Zagreb Economic Institute and the Ministry of Spatial Planning, Construction and State Property, there were 103,093 property transactions last year, a 7.7% decrease from 2019. At the same time, the value of sold properties increased slightly, by 0.5%, and reached a record value of 40 billion kuna, which is 11% of Croatia's gross domestic product (GDP). The most properties were sold in Zagreb and other large cities, particularly in Split, Zadar, Rijeka and Osijek. The Adriatic coast, including many smaller tourist destinations, was also among the top areas for property sales and purchases.

The city of Zagreb is moving its center to the periphery.

"In the past year, property sales decreased compared to 2019, but prices have risen. Reasons for this can be found in the earthquakes that hit us last year, but also in the strong demand from foreigners for properties in Croatia, mainly in the coastal area. The pandemic of the coronavirus has also steered some buyers towards less populated areas, such as Lika", explains Boro Vujović, owner of the Opereta agency and vice-president of the Association of Property Business at the Croatian Chamber of Commerce (HGK). The analysis by the Economic Institute and the Ministry of Construction concludes that it is impossible to draw a general conclusion about the movement of the property market before and after the Zagreb earthquake. However, despite this, it is estimated that the earthquake has affected the demand for properties and reduced the volume of trading in bad properties, particularly in the city center. Traders in properties have already come to similar conclusions. "In Zagreb, property prices rose this year, but most people are looking for new and newer apartments. Since there are relatively few such apartments in the city center, demand and sales of properties in peripheral parts of the city are increasing. Moreover, demand for properties in satellite cities of Zagreb, such as Velika Gorica, Samobor and Zaprešić, as well as in Sesvete, is also increasing. Prices for properties in these cities are lower than in Zagreb itself, but the quality of life is not significantly different", emphasizes Vujović. He adds that the demand for properties in peripheral parts of Zagreb is also driven by residents who want to get rid of old apartments in the city center and move into new buildings. On the other hand, demand from foreigners for properties in the coastal area continues to grow. In Croatia, around 30% of annual demand for properties is generated by foreigners, while the share of foreign buyers in the coastal area exceeds 50%. This year, Vujović believes, this share could increase even further. The analysis shows that the top locations for buying apartments and apartments on the coast are Dubrovnik, Split and Rovinj. These three cities are also the only ones in which the average price of an apartment rose to over 15,000 kuna (around 2000 euros) per square meter last year. To be more precise, the average price of an apartment in Dubrovnik was 19,671 kuna per square meter, in Split 15,283, and in Rovinj 15,157 kuna per square meter. Experts in the property market say that Opatija, Poreč, Makarska and Hvar, as well as other tourist destinations, are also well-received among buyers. The periphery of larger cities, especially those on the Adriatic, is also doing well on the market.

Agricultural land is more expensive in Istria than in Slavonia.

In addition to apartments and apartments, family homes are also selling well on the coast, with the highest average prices per square meter last year in Vrsar, 16,009 kuna, and in Hvar, 11,772 kuna, and also in Dubrovnik, 11,630 kuna. Prices for family homes on the continent are lower than on the Adriatic coast, the analysis shows. On the Adriatic coast, agricultural but also construction land is more expensive than on the continent. For example, the average price of construction land in Gradac, near Makarska, was 1,523 kuna per square meter last year, while in rural areas of the continental part of the country, construction land can be bought for less than 10 kuna per square meter. The situation is similar with agricultural land: while the average price per square meter in Tar-Vabriga, Istria, last year was over 100 kuna, in rural areas of the continental part of the country, prices were even below 50 kuna per square meter. Although the overall impression is that property prices in Croatia are over-escalated, experts believe that they will not change significantly in the coming period. "There is no space for a significant increase in prices, given the low purchasing power of Croatian citizens," says Vujović. "However, there is also no space for a significant drop in prices, at least when it comes to new buildings, given that prices of building materials have increased by around 30% over the past year." However, property prices could rise further if the exact dates of Croatia's entry into the Schengen and Eurozone were known, concludes Vujović, as this would likely stimulate additional demand from foreigners for properties in our country, particularly on the coast. An increase in inflation could also lead to further price increases, but no one expects a significant inflationary shock. Source: dnevno.hr

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