Property Market Hit by Zagreb Earthquake

Property Market Hit by Zagreb Earthquake

The Zagreb Development Bank says that in 11 months of 2020, 4346 building permits were issued for residential buildings, which implies the construction of more than 12,800 apartments.

While the effects of the Banovina earthquake are still being repaired, the Zagreb earthquake has also impacted the real estate market.

The prices of new-build square meters are significantly increasing, and demand for apartments in the city center has significantly decreased.

Apartments throughout Zagreb in 2020 were sold for an average of 1,808 euros per square meter. I would like to mention that this is the average realized price that includes new construction that is often more expensive, and apartments in older buildings that are slightly more affordable. At the same time, it means that the average square meter price in Zagreb has increased by around 8 percent compared to 2019.

At the national level, the average realized price per square meter is significantly lower at 1,630 euros, which is 6 percent more expensive than in 2019. This average includes a square meter apartment in a Slavonian village for 700 euros, but also a square meter apartment in Split for 5,000 euros.

Despite the rising prices per square meter, the Croatian property market is actually in decline, as best shown by these data for Zagreb:

In the capital, 10,000 property transactions are carried out every year, that is, sales and purchases of apartments. It is estimated that in 2020, there were 16 percent fewer of them, primarily due to the pandemic and the economic downturn it brought, but also due to the earthquake.

In some of the Zagreb neighborhoods affected by the earthquake, such as the city center, traffic has fallen by more than 50 percent.

Therefore, buyers are turning more and more to new constructions, and I have scanned the ads and prices of apartments in sought-after Zagreb neighborhoods and convinced myself that they are far above the official average.

The first of these is Trešnjevka, where a 42-square-meter apartment in new construction is asking for 1,130,000 euros, i.e., around 2,700 euros per square meter. Let's move on.

A new apartment in Jarun of 78 square meters is costing 220,000 euros or 2,820 euros per square meter.

On the other side of the city, in the Ravnice neighborhood, a 100-square-meter apartment is selling for 240,000 euros or 2,376 euros per square meter. These are, of course, the requested prices, and perhaps skilled buyers can negotiate them down to something more affordable.

Have you wondered how many buildings and apartments are built in Croatia every year? We added up these data month by month.

The State Bureau of Statistics says that in 11 months of 2020, 4,346 building permits for residential buildings were issued, which implies the construction of more than 12.8,000 apartments in the same year.

The average size is 93 square meters. I know, and it sounds a lot – but it's statistics, and you know what they say about statistics.

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