A group of advisors and agents in the real estate market in Croatia proposes that all citizens who purchase an apartment in new construction through a housing loan in 2010 and 2011 and who lose their jobs during the repayment period, the state should cover the interest costs on the loan during a period of up to six, and exceptionally nine months, while the creditor would ensure a grace period for the repayment of the principal.
This measure to revive the real estate market, proposed by a group of real estate agents and the consulting firm Colliers International, was presented today at a round table organized by Colliers. When the loan user is re-employed, they would repay the debt to the state in installments and continue to repay the loan normally, and if they fail to find employment, the usual methods of forced loan collection would be activated, according to the proposal submitted to the Government, the Ministry of Construction, HUP, unions, the Croatian Banking Association, and GSV. The measure, according to the participants of the round table, would have a distinctly favorable psychological effect on potential apartment buyers, which is crucial as the main reason for the stagnation in sales is the fear of borrowing due to the possibility of job loss.
It would cover at least three thousand, and at most ten thousand apartments and would be valid for a maximum of two years, or until the exit from the recession, or until revoked. The proposers emphasize the positive effects of such a measure in the Czech Republic and Slovakia. If the implementation of the measure included the sale of all ten thousand newly built, unsold apartments, it would cost the state 13.5 million kuna annually, based on assumptions of an average loan amount of 500 thousand kuna and an unemployment rate drop of seven percent in 2010, says Ilijana Jeleč, CEO of Erste Real Estate. She emphasizes that this is a conservative estimate, as analysts predict that employment will fall significantly less than seven percent.
