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Post by londonhack on Jun 30, 2006 12:34:25 GMT 1
I love croatia and would love to buy a property there - but why is it so expensive to buy? Are there two property prices - one for locals and one for foreigners? Do people put their properties on the market in the hope that someone will eventually buy them? Are they willing to wait long term? Do people actually pay these prices?
Am very curious as to the reason - especially as I'm finding southern italy (in EU) very much cheaper in contrast, when I would have expected the opposite
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Post by irac on Jun 30, 2006 13:37:58 GMT 1
londonhack, welcome to the world of insane no limit pricing. In other countries you have certain elements driving up prices (buoyant economy, industrialisation, solid rental returns, high levels of tourism etc, great infrastructure) yet here, hardly any of these exist! A lot has to do with the government attitude to building and setting plans. Rather than spend the money on a large scale project like refurbishing and re-opening a hotel, they'd prefer to get an investor in to do it, on concession yet holding 10-30% of the shares of the object, now how many foreign investors are going to do that.......! And because of this laissez faire attitude to investment and structure, the government supports the building of copious (on the surface) amounts of apartments and "summer homes" that make no sense. Everything is jammed into small areas where facilities (largely unplanned) are overcrowded and underdone. So basically instead of a planned or controlled development, the government (because there are a lot of very very self-interested and sticky fingered folks among them) allow anything and everything to be build for the right price.
So, in such an atmosphere you have developers commanding prices, say, ˆ1,000 per m2 built, they pass these onto one agent who tacks on ˆ200 per m2, who sub-lets it to other agents who also tack on ˆ200 per m2, so the price spirals and with each new building the price rises again, and unrealistically so. But outside of these mad areas there are relatively sane prices, but again infrastructure may well be lacking.
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Post by capio on Jun 30, 2006 13:47:56 GMT 1
Its all down to greed, the proerty market here must be a nightmare for agents, sellers would rather wait 4 years and sell at an inflated price then at a fair price in a reasonable time. Foreign real estate agents are often blamed but they are mostly based on the coast and Zagreb is just as bad.
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Post by lojalnost on Jun 30, 2006 14:27:33 GMT 1
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Post by londonhack on Jun 30, 2006 15:37:57 GMT 1
So.. am I being naive expecting property to be cheaper in Croatia rather than in an EU country where it will be much easier to find a mortgage for, not have problmes with officialdom, for example not having to report every visitor to local police; where there is already established international tourism facilities and plenty of cheap flights to and from?
Apologies if i sound negative but from what i read on here it is not a simple business buying and renting a property in Croatia. But perhaps I am getting the wrong impression? I would love to be contradicted!
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Post by valiant on Jun 30, 2006 15:42:06 GMT 1
i agree with irac and capio!!!
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Post by lojalnost on Jun 30, 2006 15:45:36 GMT 1
So.. am I being naive expecting property to be cheaper in Croatia rather than in an EU country where it will be much easier to find a mortgage for, not have problmes with officialdom, for example not having to report every visitor to local police; where there is already established international tourism facilities and plenty of cheap flights to and from? Apologies if i sound negative but from what i read on here it is not a simple business buying and renting a property in Croatia. But perhaps I am getting the wrong impression? I would love to be contradicted! you are perfectly correct in your assumptions, Croatia is attracting those who wish to make a fast buck!
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Post by lojalnost on Jun 30, 2006 15:48:14 GMT 1
i agree with irac and capio!!! Yippeeeeeeeeeeeeeeeeeee!
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Post by Ribaric on Jun 30, 2006 15:50:55 GMT 1
My experience here in Varazdin is the same as capio's. People seem unable to sell unless they feel as though they are making a killing. They'll sit on property which will never sell at anything like the asking price and they lose on the interest they would have gained from the money they won't accept. There's an amount of peer pressure in that people are scared that a neighbour will say "you could have got a lot more than that" especially from a foreigner. Rather than lose face, they'll lose a sale and lose money via the dripfeed method. Market forces are weaker than the peer pressures it seems.
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Post by londonhack on Jun 30, 2006 16:06:12 GMT 1
That's really interesting Ribaric. I sort of had that impression looking at properties earlier this year in Rovinj. One example: the waitress in a cafe we went to told us she wanted to sell her 3-bed apartment in the old town for 200,000 euros. Not negotiable. She said it had been on a website waiting to be sold for ages. I get the impression quite a few people are putting details out there at silly prices just waiting for someone to bite. But do they really think that potential buyers like myself don't shop around?
I don't understand the point made above that the only people investing want to make a quick buck - at the prices I've seen it doesn't look like there's much profit to be made. Or do you really think prices will go up and surpass those in italy, spain levels once Croatia joins the EU? It's a very beautiful and special place, yes - but it has nothing like the facilities that, for example, Majorca has if we are talking about attracting international investors with money.
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Post by Sasha on Jun 30, 2006 16:06:47 GMT 1
Thanks Ribaric and Capio: you hit it right on the head.
One example, one of my distant relatives owns a totally neglected vineyard/orchard (maybe 2 acres)with a habitable cottage (no electricity or water) in a pretty location, about 25 minutes walk from Varazdinske Toplice (Spa).
She does not needed this property, it is a burden for her, and she rarely visit it etc
A few years ago a neighbour offered her 5.000 Euros for it, she was seriously considering the offer, but was persuaded by her family that it was too low. Now, I feel she would be, most likely asking 50,000 Euros for it. Crazy!
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Post by lojalnost on Jun 30, 2006 16:26:19 GMT 1
well MONEY IS THE ROOT OF ALL EVIL and you should hear an extended Croatian family squabble over some of these old ruins. Its quite tragic really.
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Post by capio on Jun 30, 2006 16:30:20 GMT 1
I'm not sure about that loj,women are pretty evil too.
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Post by lojalnost on Jun 30, 2006 16:31:19 GMT 1
...yeah you got me there (especially Croatian ones )
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Post by krashkokos on Jun 30, 2006 18:47:12 GMT 1
A Croatia bubble? I could be wrong, but this is the first I've heard the bubble word mentioned on this board. But it's been in the back of my mind for two years. Or ever since my wife and I tried to buy a small property in a not-even-near-the-sea village in Vis. As soon as we put our bid in, the price nearly tripled.
All over the globe, historically low interest rates ran up property prices, esp. around the Med. Now, with interest rates creeping up in the EU and big time in the U.S., property values will have to react accordingly. Sure there are a ton of Brits tappipng into the equity of their million pound flats and buying Dalmatian get-aways, but will this too last? I think it is extremely risky to fork down a quarter of a million Euros on Croatian property (or any Med property) at the moment. You could get seriously burned. And the more greedy Croats unwilling to sell their old stone ruin for a reasonable figure, will be smarting as well. But at least their neighbors will hold them in high esteem for holding out on the old goat pasture!
It's about time this forum addressed the reality of over-inflated house prices in a rising interest rate reality. Something's got to give. Most likely, prices by 10-30 percent.
—Krash
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