Buying real estate In Croatia

Buying real estate in Croatia, but also in the world, is traditionally one of the safest investments. It is a kind of savings that can be passed down from generation to generation and makes it one of the most attractive investments of a financially capable citizen.

In the last few years, the real estate market has been hit by a pandemic that continues after the end of the COVID crisis. The market suffers from the ironic fact that the price of real estate has reached dizzyingly high amounts, while buying real estate in recent years has been easier than ever.

The recessionary crisis of 2008 was responsible for the first wave of rising rents and purchase prices, which began to grow exponentially since 2015. Wealthier foreigners began to buy real estate at sea and around Zagreb, creating even greater polarization in prices between Slavonia and rural areas. location on the coast and major cities. The state, in cooperation with the Agency for Legal Transactions and Real Estate Brokerage (ATP), offered subsidies to young people when buying their first property in order to try to correct the market.

The record low rate of ATP loans, in turn, caused new problems. The first of these problems occurs in a relatively easy abuse that many noticed very quickly. Young people used these favourable loans to buy real estate from their parents or even to buy real estate that they would convert into apartments and rent out. As more people suddenly appeared interested in buying, there were more potential buyers in the market than there were real estates in circulation. This caused a war in market prices and thus, following the basics of supply and demand, another jump in property prices.

We must not forget that such jumps in prices cause panic among the population that does not own a single property. Prices are rising year by year, and the longer tenants wait to buy, the greater the chance that they will never be able to afford it. Rental prices are also going up, putting that part of the people at an extremely disadvantage that can result in catastrophic consequences for poorer citizens.

Croatia, on the other hand, unlike the rest of the world, does not have so many problems with the “real estate bubble”. While it is true that every new property built over the last few years has been sold, some places are simply gaping with empty apartments. The chronic problem of emigration of young Croats, especially in rural areas, in a way helps to balance the previously mentioned problems by offering the option of buying apartments within cheaper parts of the Republic of Croatia. If we compare only the difference in prices, the square footage of new construction in Zagreb can reach 5,000 euros, while in rural areas it does not exceed 2,000.

According to expert economists, the rise in housing prices will continue to rise for some time and follow inflation. More and more people will want to invest in real estate to preserve the value of their money due to the extremely low savings interest rates currently present. However, there will probably be no “bubble burst” in Croatia, and the market will stabilize over time.