The value, as well as the number of real estate transactions by foreign buyers in the first half of 2023, has fallen in Croatia to the lowest levels in the last two years, and overall demand for real estate is on a downward trajectory.
According to HNB data, the number of residential real estate transaction sales in the first half of 2023 decreased by about 12 percent year-on-year, indicating that even with the housing loan subsidy program, the previous level of demand could not be maintained.
This is a logical development considering that the rise in real estate prices combined with rising interest rates creates an environment that certainly does not encourage demand. For the population, the interest rate on first-time contracted cash non-purpose loans increased by 73 basis points from June 2022 to August this year, reaching 6.05 percent in August, while for housing loans, it increased by 131 basis points to a level of 3.55 percent.
However, this is still significantly lower than the increase in interest rates for corporate loans. In that case, the interest rate on first-time contracted loans increased by 344 basis points and reached 5.14 percent at the end of August this year.
Promotional Interest Rates
Judging by these figures, banks have clearly assessed that it is more lucrative for them to offer better interest rates for individuals and direct lending more towards that segment.
These days, promotional interest rates are even being offered, as Zagrebačka banka announced that from November 6 to December 6, 2023, it will offer reduced interest rates on housing and cash loans. The promotional interest rate on housing loans is thus fixed at 3.49 percent (EKS: 4.44 percent), and for cash loans, it is also fixed at 5.29 percent (EKS: 7.06 percent).
To see how attractive this promotion is to consumers, we checked the HNB website to compare these rates with those of other banks.
According to the Informative List of Loan Offers to Consumers by HNB (https://www.hnb.hr/informativna-lista-ponude-kredita-potrosacima), currently, more favorable housing loans are offered by Wustenrott Housing Savings Bank, Karlovačka Bank (EKS: 4.07 percent), Istarska Credit Bank (4.18 percent), and PBZ (4.38 percent).
When it comes to cash loans, again the most favorable rates are offered by Karlovačka Bank (EKS: 5.96 percent), followed by Erste (6.06 percent), Istarska Credit Bank (6.73 percent), PBZ (6.88 percent), and Croatia Bank (6.98 percent).
