Four Factors Affecting the Real Estate Market, with One Part of Croatia Being Particularly Interesting

The situation in the real estate market is very interesting. Four key aspects are currently affecting the market – tightening conditions for obtaining housing loans, APN subsidized loans, and, of course, the earthquake in Zagreb and the outcome of the tourist season. 

– There are more than enough buyers, but there is a lack of good and quality properties. Demand for houses and construction land has increased, while demand for old apartments in the center of Zagreb has decreased, as a direct consequence of the pandemic and the earthquake – says Boro Vujović, owner of the real estate agency Opereta. 

He emphasizes that banks have tightened lending conditions, which is evident in the smaller amounts that clients are able to obtain.

– Most banks have reduced the amount of appraisal and the approved financing amount, which is now 1:0.8 – says Vujović, adding that some banks only approve loans to their clients.

Regarding APN and subsidized loans, which have so far caused price increases, Vujović claims that the indicators he monitors show that this time it will not lead to price increases because there is a smaller pool of buyers purchasing apartments after a successful tourist season.

– Many buyers who were counting on APN have already secured their property and are waiting for subsidies – believes Vujović. He notes that the overall market climate is different from what it was last year, so he does not expect price increases.

– It is good that the government has announced another round of APN subsidies because some buyers expected it, but we hope that the new old government will create a long-term strategy and conceptualize subsidies differently – hopes Vujović. 

The pandemic will have its impact on the entire economy, including the real estate market. If a significant economic downturn occurs, it will certainly affect the market and prices.

– What is now visible is the increase in prices of agricultural land and houses in Lika and Gorski Kotar – concludes Vujović, stating that a price drop in certain segments of ‘inferior’ properties may occur.

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