Thursday, 25 August 2022

Excellent Tourist Season Mixes With Croatian Property Price Increase

August the 25th, 2022 - The Croatian property price increase has been enormous, and so far, this summer tourist season has well and truly outdone that of last year and of couse of 2020.

As Poslovni Dnevnik writes, when speaking solely in terms of income earned, the current tourist season could reach the record year of 2019 at the end of August, Tourism Minister Nikolina Brnjac confirmed in a recent interview for N1.

That's why experts expect that this year's tourism revenue will be 30 percent higher than that often referenced, record-breaking pre-pandemic year. Those who earn their cash from tourism now have "sweeter" troubles to ponder over, such as what to invest their earnings in under the circumstances of high inflation that is rapidly eating away at the value of money itself. The result: the expected new Croatian property price increase.

According to the indicators so far, the season is going more than excellently. We aren't nearing the end of 2022 yet, but Nikolina Brnjac is already extremely satisfied with the income earned this summer from tourism.

"According to some calculations, if this continues, we calculate that at the end of August and the beginning of September, we'll manage to surpass 2019 in that segment," said Minister Nikolina Brnjac.

While that's all well and good, just how much does that satisfaction amount to in the currency of the Croatian future - euros?

"Well, back in 2019, there was some 10.5 billion euros in income earned from foreign tourists, and now the CNB's projects are 11.3 billion," said Brnjac.

"If we're talking about Split, we're talking about Croatian buyers of property, apartment buyers, and if we're talking about destinations like Primosten or Rogoznica, in addition to locals, foreigners also buy property there, and they do so in significant numbers," said Marin Biliskov, director of the Biliskov real estate agency, writes N1.

"If we look at tradition, a good season down on the coast always meant a good property selling season in Zagreb," said Boro Vujovic, the director of the Opereta real estate agency.

A good season means higher demand and higher prices, and when it comes to Croatian property, we're already seeing record growth by as much as 20 percent compared to last year. The average square footage of a new building in Croatia stands at 2140 euros.

Is there room for additional Croatian property price increases?

"Given the average income and standard in Croatia, regardless of a good summer tourist season, I think prices have reached a point that shouldn't be exceeded now. But as long as the demand is greater than the supply, it's an economic law that the price goes up," said Biliskov.

As Vujovic says, if the prices of energy and everything else rise, then real estate prices will rise as well.

"I think it will slow down because interest rates will rise, some people just won't be creditworthy, so that will reduce demand," Vujovic said.

The demand of foreigners for property in Croatia is also constantly growing. Croatia's entry into the Eurozone and Schengen could stimulate both domestic and foreign demand.

"What we mustn't ignore is the significant activity of foreign buyers who, with Croatian entry into the Eurozone and Schengen, will raise awareness of Croatia as an interesting investment destination precisely through transactions in euros. Although transactions were tied to the euro but realised in kuna, they'll now be able to realise everything in euros, which will further stimulate the interest of foreign buyers," said Vedrana Likan, director and partner of the Colliers company.

For more, make sure to check out our dedicated lifestyle section.

Tuesday, 2 August 2022

People Seeking Construction Land as Croatian Property Prices Soar

August the 2nd, 2022 - More and more would-be buyers are seeking out land on which they can construct something for themselves as Croatian property prices continue to soar to extremely high levels.

As Poslovni Dnevnik writes, Croatian property prices and their constant increases are apparently unstoppable at this moment in time, but despite the wildly overpriced square footage, demand is far from abating. In addition to houses and apartments, in the last two years ,there has been a significant increase in interest in building land, as reported by HRT.

For two years, Stefano Ladavac intensively searched for construction land in the very heart of Istria. The offer is weak, and the prices have never been higher, he claims. He now considers a plot of land in Sveti Petar u Sumi perfect for the construction of two villas that he will rent out when they're completed.

"We're absolutely satisfied with the price we got, we paid 22 euros per square metre, and approximately the initial average price of construction land in Sveti Petar u Sumi is 40 euros per square metre, so we did very well in that regard,'' said investor Stefano Ladavac.

There isn't much choice to pick from in the City of Zagreb either. The seller of land near the capital's Franjo Tudjman International Airport is asking for 65 euros per square metre. The price is dictated by the market, and according to the market as it is at the moment, that price is very realistic. At the same time, it is twice as high as it was when the construction land was purchased six years ago.

Cheap borrowing encourages buying, and with the current inflation rate as it is, money invested in property will not lose value. Building plots are most in demand in the cities of Zagreb, Split and Zadar, and Croatian property prices for all types of building are at record highs.

"I don't see a situation in which Croatian property prices will come down in the foreseeable future. The market is active, so I think it will continue in this way, given the country's imminent entry into the Eurozone," said real estate agent Mia Vucic.

The latest data from Eurostat shows that Croatian property prices increased by thirteen and a half percent in the first three months of this year alone when compared to the same period last year, which is above the European Union (EU) average.

For more, make sure to check out our dedicated lifestyle section.

Monday, 23 May 2022

Istrian Apartment Prices Skyrocket, New EU Plan to Cause Further Rises

May the 23rd, 2022 - Istrian apartment prices have shot up recently, and a new European Union (EU) plan regarding greener energy sources is set to contribute to even further price increases.

As Poslovni Dnevnik writes, Istrian apartment prices have been climbing and climbing, and with the recent introduction of obligations to install solar panels for the production of electricity in all new residential buildings as part of an EU directive, they'll likely keep heading on an upward trajectory, writes Jutarnji list.

The European Commission (EC) recently announced the ''REPowerEU'' plan, which aims to quickly reduce the bloc's overall dependence on fossil fuels imported from Russia, against which there are harsh sanctions in place following their invasion of neighbouring Ukraine, and further work to encourage the green transition. As part of that move, among other things, the mandatory installation of solar panels on existing public and commercial buildings and all new residential buildings in early 2026 has been put into force.

"The cost of construction will certainly be higher for a new building, and relatively higher for existing ones," said the Croatian Chamber of Civil Engineers (HKIG). The chamber also warned that the cost of investment and maintenance of each building should be looked at as a whole, and a cost analysis should be taken into account.

“If we look at the entire so-called life cycle of a building, then there will certainly be no increase in costs due to the installation of solar panels. This will reduce energy costs, which is a significant item when it comes to costs in the phase of using one building,'' the chamber noted.

As is well known, the price of Istrian apartments has been growing very significantly over recent years. Any slightly better position can hardly be bought for less than 2,000 euros per square metre, most often more. New construction, on the other hand, has now approached the price of 3,000 euros per square metre.

The cost of installing solar panels on these buildings ranges from 40 thousand to 70 thousand kuna.

For more, make sure to check out our lifestyle section.

Saturday, 11 January 2020

Croatian Property Price Data Highlights Dramatic North-South Divide

The north-south divide is a common situation in many European countries. The United Kingdom is one notable example, in which the south absorbs an enormous amount of money as the north tends to get mere scraps. This is more or less down to the fact that London is situated in the south of the country, but what then, with its capital in the north, is Croatia's excuse? Tourism and the sea are safe bets... A look at Croatian property prices reveals some shocking statistics. 

As Novac writes on the 11th of January, 2020, the dramatic difference between the north and the south of Croatia is reflected in the prices of family homes, according to the latest analysis of the Ministry of Construction and the Institute of Economics in Zagreb - "Croatian Real Estate Market Review 2018", which delves deep into the Croatian property market and the huge differences between north and south.

These are real transaction prices, so this analysis most certainly shows the real state of the estate market and Croatian property prices. In the continental town of Bjelovar, the lowest median price per square metre in a house was a mere 36 kuna. After that come Koprivnica (54 kuna), Virovitica (62 kuna) and homes in Požega-Slavonia County (86 kuna).

The most expensive square metre in a house at the median price was in Split-Dalmatia County (4,354 kuna), Primorje-Gorski kotar County (4,334 kuna) and Šibenik-Knin County (4,228 kuna). According to the analysis, it would mean that for the price of one 100-square-metre house in Split, one hundred houses of the same size can be bought in, for example, Bjelovar. An enormous, hardly comprehensible difference within one small country.

Could this really be so? This incredible difference in Croatian property prices seems truly remarkable, so Novac asked one of the authors of the analysis, Maruška Vizek, a scientist from the Institute of Economics. She explained that the data does indicate massive regional differences in Croatian property prices, but they can be even further magnified if the data from eNekretnine, the system from which they collected the sales contracts, isn't evaluated.

''In other words, it's possible that intentionally lower prices than market prices are put into purchase contracts to reduce the amount of property sales tax, and then we see even greater price differences between regions,'' she explained.

Concerning apartments, the same analysis states that back in 2018, 23,736 apartments and flats with a total value of 13.2 billion kuna were sold. Taking first place with a median price of an apartment/flat of 12,158 kuna per square metre is, rather unsurprisingly, Dubrovnik-Neretva County, followed by Split-Dalmatia County with the price of 11,669 kuna and then the City of Zagreb with the price of 9,459 kuna.

Median apartment/flat prices in other counties ranged from 2,967 kuna per square metre in Vukovar-Srijem County to 5,840 kuna in Osijek-Baranja County. This would mean that for one square metre in an apartment/flat in Dubrovnik-Neretva County, you could purchase 4.1 square metres in Vukovar-Srijem County, since the difference in the median price per square metre between the two counties is as high as 9.191 kuna.

Make sure to follow our dedicated lifestyle page for more on Croatian property prices.