Real estate market showing recovery, prices still below 2008 pre-crisis levels

Ilustracija

Croatia's real estate market is recovering and the country's stimulating macroeconomic environment gives reason for optimism going forward, panellists at a business conference on real estate in Zagreb organised by the Croatian Chamber of Economy (HGK), said on Monday.

“The real estate market is recovering, but the pace of its growth is still below what we would be happy with. Although the market is gradually picking up, real estate prices are still 15.6 percent lower than before the 2008 recession. However, we are optimistic because the macroeconomic environment is stimulating. Croatia’s GDP growth is accompanied by growing salaries and falling interest on loans, while the construction sector is becoming increasingly active, resulting in more new buildings on the market,” said vice-chairman of HGK, Josip Zaher.

A senior official of the Ministry for Construction, Zeljko Uhlir, talked about the current state of the local real estate market, saying that the growth in the national GDP is reflected in the increase of both apartment prices and construction permits issued.

He added that the most vibrant real estate markets are the cities of Zagreb and Split, that land plots are marketed all along the coast, while in the rest of the country farmland is sought after.

He said that an average citizen of Split must pay about 20 percent of his yearly income to pay for a single square metre of an apartment, and that the ratio is similar in Zagreb and all popular tourist towns, whereas in the rest of Croatia prices are generally more affordable.

Uhlir also warned about a lack of workforce in the construction, adding that this too affected the price of building new housing, and ultimately raises the prices of apartments.

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