House Prices in Croatia Recovering

After consecutive years of falling prices, Croation house prices have begun to stabilize. Although prices are not expected to reach levels seen before the downturn, the latest numbers …

After consecutive years of falling prices, Croation house prices have begun to stabilize. Although prices are not expected to reach levels seen before the downturn, the latest numbers show a positive turnaround. See the following article from Global Property Guide for more on this.

Croatian house prices have stabilized, after mild but steady price falls since 2008.  The national price of advertised houses was slightly up (0.4%) in January 2011 from the previous month, but 3.8% down on the previous year, according to CentarNekretnina.  January’s increase was the third consecutive monthly increase since the bottom. From its peak in September 2008, the national house price index had fallen 11% to October 2010.

The average price of flats in Zagreb was €1,825 per sq. m. in January, 2.3% down on a year earlier but up by 0.4% from the previous month. Zagreb house prices 8.5% down from January 2010, but 4% up from the previous month at €1,163 per sq. m.

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Property prices on the Adriatic Coast, Croatia’s most popular tourist destination, were more resilient.

  • The average price of seaside cottages and apartments was €2,055 per sq. m. in January 2011, up by 0.2% from the   previous month and down by a mere 0.3% from a year earlier. 
  • The average price of houses was €1,564 per sq. m. unchanged from last month and down only 0.7% from last year.
  • But the average price of Adriatic Coast flats was % from the previous year at €1,864 per sq. m. in January 2011.

House price rises are unlikely to return to the momentum of pre-crisis years, due to high levels of non-performing loans in the banking system (9.5% of all loans). In Q3 2010, GDP was up 0.2% y-o-y, the first annual increase since 2008.  Croatia’s GDP growth in 2010 was negative (-1.5%). Though a significant improvement on its 5.8% contraction in 2009, the result has been high unemployment (19.6% in January 2011 – the highest in eight years).

This article was republished with permission by Global Property Guide.
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