Experts forecast what will happen to real estate prices by the end of the year

Although the total number of residential real estate transactions last year increased by 12.6 percent compared to 2021, real estate brokers noted a slowdown in that trend at the end of last year and the beginning of this year, "which is attributed to the decreasing number of citizens who want to buy or they can afford properties with unrealistically high prices”.

This year, no significant drop in real estate prices is expected, and in the last few years, the asking prices have grown at a higher rate than realized, which indicates that the asking prices are too high, the Croatian Chamber of Commerce (HGK) points out and says that a high-quality long-term program for housing should be adopted taking care of.

The unaffordability of real estate is a big challenge for an increasing number of Croatian citizens, therefore it is high time that the state or local self-government units start to think systematically and analytically about appropriate models because the existing ones do not achieve the goal, according to the press release from the 35th real estate business forum, which is organized HGK and the Real Estate Association held on Friday and Saturday in Šibenik.

"Although the slowdown of the real estate market has been recorded since the end of 2022, no significant drop in prices is expected until the end of this year. There is a lack of supply in all segments, especially in new construction, and the unaffordability of real estate in the larger cities on the coast and in Zagreb is a growing problem," HGK warns.

As they state, in the last few years, the requested prices of residential real estate grew at a higher rate than realized, and the difference increased in 2022 compared to 2021 and amounted to 23 percent, "which indicates that the requested prices are too high".

"According to data from the Real Estate Exchange, the growth index of realized prices last year compared to 2021 was 14.75 percent at the price level in Croatia, and the average realized/achieved prices were 2,280 euros per square meter on the coast, 1,980 euros per square meter in Zagreb and 1,804 euros per square meter in the rest of Croatia", according to the Chamber.

Although, as they further state, the total number of residential real estate transactions last year increased by 12.6 percent compared to 2021, real estate brokers noted a slowdown in that trend at the end of last year and the beginning of this year, "which is attributed to the decreasing to the number of citizens who want to buy or can afford properties with unrealistically high prices".

Trends will depend on macroeconomic and other indicators

In HGK, they estimate that the activity on the real estate market this year will depend on the usual macroeconomic indicators such as the GDP rate, but on whether there will be the necessary segmentation and greater price differentiation, according to the criterion of new construction-used real estate, as well as all other criteria.

"It will no longer be easy and quick to sell used, run-down properties in unattractive locations, at unrealistically high prices, because the pool of buyers who are willing or able to pay for them has been 'used up', because there is no longer an APN that encouraged many to buy too expensive real estate. Also, the introduction of the euro has been completed, which strongly influenced the increased demand in 2022", said the president of the professional group of the Real Estate Business Association of the Chamber of Zagreb, Lana Mihaljinac Knežević.

As she pointed out, a big drop in average prices is not expected this year, especially not for luxury new buildings, because a very small number of built properties in that segment will continue to find buyers.

Every third buyer of real estate on the Adriatic is a foreigner, most often from the EU

"The market on the coast is under the significant influence of foreign buyers, especially during 2021 and 2022, and the trend has continued this year as well, and now every third buyer of real estate on the Adriatic is a foreigner, usually an EU citizen," the Chamber points out.

The increase in demand is accompanied by the increase in the prices of all types of real estate and land by the sea. New buildings in larger cities have reached very high prices and range from 3,000 euros to 5,000 euros and even more, depending on the location and the standard of construction and equipment, and have become difficult to afford for Croatian citizens, say HGK.

The state should adopt a quality long-term program for housing care

Considering these trends in the real estate market, especially in terms of residential real estate and solving the housing issue, real estate dealers are of the opinion that the state should adopt a quality long-term program for housing care.

"Primarily, I am thinking of building residential parks on state land, not far from major cities. For example, to build housing parks on local self-government land, new neighborhoods with complete infrastructure, schools, kindergartens, village facilities, organized public transport, in locations about 30 kilometers from larger cities", suggests the vice-president of the Association of Realtors at HGK Jasminka Biliškov.

The prices of such apartments, he says, should be significantly more favorable, both for purchase and for long-term rent.

Almost all EU countries have models of affordable housing, they are different, but they are generally based on public-private partnerships that put affordable apartments for rent on the market, HGK reminds.

Source: poslovni.hr

Tržište nekretnine, 14. May. 2023.