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Post by Sasha on Dec 26, 2006 15:28:07 GMT 1
"Prices are going up and it is still a sellers market.
The only country in which we see a strong demand for leisure – larger than the general one in the region, is Croatia."
All this from Property Xpress online publication, but could not get it more as this is a subscription (fee) publication. Maybe somebody else is a sybscriber.
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Post by yeslehc on Dec 27, 2006 0:02:41 GMT 1
biggest load of b.s. ive heard this year. ask some of the honest agents, they will tell the truth.
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Post by capio on Dec 27, 2006 1:25:51 GMT 1
I think it's bull too but for a different reason, nobody really has a clue if prices are going up or down, I have spoken to lots of 'experts' in Croatia on property locals and foreigners, working for small businesses and big multi-nationals I have also asked people on here in the past about property prices.
The true answer is nobody has a clue, people ask for a price and they either get it or they don’t, there is very little structure or reliable info on property prices there.
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Post by irac on Dec 27, 2006 8:20:50 GMT 1
David, I have to disagree on one point (while agreeing that everyone sets their own prices according to the number of beers they have or how young the mistress is). Actual land prices ARE known, and are available but the vast majority of "agents" haven't the interest or knowledge to present them. What makes it worse is the vendor price and the agent price, which is endemic here, it forces up prices and while the vendor in a case knows the score, a not so informed neighbour figures they can pull in what they like.
I know my collegues are spending more of their time looking after construction or renovation projects than sales here and on the coast, mainly because prices don't reflect the product, product being the property and the amenities. How Croatia could be classed as a leisure destination with nothing outside of overpriced sailing, unsafe diving and poorly serviced skiing. Unless HDZ quit feathering their own nests and embezzling money, the 10 year idea of having a good infrastructure and proper tourist industry, but when the tourism chiefs can't even get it right, then we're looking towards 20 years.
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Post by capio on Dec 27, 2006 13:15:38 GMT 1
All I cans ay from experience is when I tried to get info to see if my property in Zagreb had increased in value, nobody knew including an agent for a large multinational.
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Post by mirabelle on Dec 27, 2006 18:52:42 GMT 1
Properties in HR are so unrealistically priced that anyone in their right mind would not want to buy. The state of most of the resale houses are shocking. One wouldn't touch them with a barge pole. Buying offplan is a nightmare and a half.
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Post by irac on Dec 27, 2006 18:59:51 GMT 1
All I cans ay from experience is when I tried to get info to see if my property in Zagreb had increased in value, nobody knew including an agent for a large multinational. Large multinational what though? I know of some firms who deal in property (one royal fish one in particular) who are disastrous and ultimately lazy. Go to your local opcine, then contact APN, cut between the two to get a higher than average price, but the local council one will say more about what it's worth for locals to buy and sell. Mirabelle it depends on where you go, last month our property honcho was trying to close a deal near Zadar with a pretty decent (I'd thought) agency, but they tried to pull a fast one at the last moment and push the price up, no new bidder, no gazumping, just greed on the agent and vendor side. The client pulled out and promptly bought in, of all the places, Gracac (okay, it's commercial use). I agree with off-plan, the biggest nightmare an uncle of mine discovered is that summer 2005 actually means Spring 2007, and that a car parking psace costs extra!
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Post by rijekafan on Feb 5, 2007 10:58:20 GMT 1
My information is that the credit squeeze has reduced values in Zagreb. It has certainly put a lid on prices here in Rijeka.
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Post by mambo on Feb 5, 2007 11:25:18 GMT 1
I spoke with a representative of Erste Bank last week and they confirmed that the housing market in Istria is stalling. Customers are not willing to pay the high prices and houses remain unsold.
When I asked her why Erste Bank was then still selling the 'development loan' she became all quiet. Erste Bank has a loan for real estate developers, which is not a bad deal if you first look at it. They require you to have the land and the building permission (fully paid of course) and then you can apply for a loan for the construction of the house. The loan is valid for 2 years after completion of the house and you cannot use this loan as a mortgage. Interest rates are 6 - 8 % and of course there is a penalty if you repay the money before the end of the contract period.
If you are unable to sell the house in those two years you either pay the house in full by borrowing money somewhere else or they take the house from you. Nowadays, more and more houses are taken away by the banks.
And even that does not surprise me. I still don't understand why sellers won't sell a house for 1200 to 1500 euro/m2 if they only paid 350 to 700 euro (in case of luxury build) per square meter to build it. Here in Istria they insist on getting 2500 to 3000 euro for a square meter.
Prices for the building cost were given to me by an architect here in Porec.
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Post by Carol on Feb 5, 2007 13:21:52 GMT 1
18 months ago we wished to rent some office space for six months whilst we waited for our own offices to be renovated. We found a place quite easily (it took an hour!) but it was larger than we needed. We explained this to the owner and made a very generous offer based on what we required but recognising we'd be getting more than that even if we could not use it. He turned it down flat. Guess what? He still hasn't received a single kuna for that space whilst he holds out for a high price per square metre on a large space. And the funny thing is I am sure that if we went back and asked him if he wished he had taken our €4000 now, he would still say no. As he said at the time, he is from Zagreb so he knows about business!
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Post by irac on Feb 5, 2007 14:16:46 GMT 1
The prices (real are known but not enough in real estate are trained or are willing to acess or explain, or even reject overpriced properties. It's not always greed, just a lack of understanding of breaking down prices, and having an overall view of current and future development. Of course there are lots of local "experts", some are failed (disbarred) professionals, quick buck merchants or (as Carol points out "business people". To operate property sales on rumour, lies or pure nonsense is destroying property here. We recently sought land for a sports centre but it was rubbished thanks to locals who knew that having such things nearby would ruin landprices, when it's 1km from town and in famrland. Very informed indeed.
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Post by rijekafan on Feb 5, 2007 14:31:52 GMT 1
I have been to every Croatian bank looking for finance and only found 2 decent ones (In Rijeka) They were the Istrian Credit Bank and the Primorska Bank. The problem was after all the fees it was much cheaper for me to borrow in Australia. Its a pathetic situation as I only wanted to finance 50% of my property. The property market in Rijeka is still very healthy but its just that credit is a hassle. The problem is that apart from the two banks I mentioned those with bodgy papers often get the loans and those who are honest lose out.
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Post by rijekafan on Feb 5, 2007 14:37:19 GMT 1
Another thing I wanted to mention is that I dont listen to Croat property predictions anymore. They have never seen a real property downturn and think prices will keep going up everywhere as if by magic. That BTW includes my girlfriend who is now a veteran. She repeats the mantra that everybody says things will keep going up. The fact that prices have recently gone down just doesent seem to have gotten through. I think there is still real value in this market and I am buying as we speak. When I have completed my purchases I will let you in on a secret which in retrospect seems totally obvious. BTW I am a professional investor and only buy on net rental yields of over 6%
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Post by Carol on Feb 5, 2007 15:00:13 GMT 1
They have never seen a real property downturn and think prices will keep going up everywhere as if by magic. That is true! But it doesn't just apply to the Croatian property market. Has anyone stopped recently to ask what is driving the stock market higher these days? My personal opinion is that the property market here is undergoing a structural change which can justify future price increases. I really don't see any justification for the same thing in equities however.
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Post by mambo on Feb 5, 2007 19:27:16 GMT 1
Rijekafan,
In order to get a loan they want 'collateral' and without it you can kiss any loan goodbye or you will be paying a fortune in interest rates, penalties etc. The smaller banks are inherently dangerous to do business with, since they fold like the morning newspapers and there is no national bank to protect your money in that case.
The fact that people think the prices of the houses can still go up has nothing to do with the actual market itself. At the moment we see an influx of British and Scandinavian buyers who are still willing to pay rediculous prices, but here in Istria we can safely say there is a dramatic slowdown in the sale of houses. This however does not mean that the building of houses is slowing down, they are still building like crazy and are still increasing the prices. Problem is that they cannot find buyers for these houses and many have been on the markets for many years. One trend that we see coming in is houses with swimming pools. It is an addes value tourists appreciate and it can cause the sale to speed up, but even then houses are not flying away anymore.
The one thing that I am surprised about is that nobody is trying to sell a house in a sort of time sharing package. Instead of buying the house alone they could offer the house in 4 shares. Another option would be to sell houses which belong to a vacation village. The owners can still use the house for a certain period per year and in the mean time they do get a return on investment since the apartments are rented to tourists (in a legal way).
Here it is still too traditional, not a lot of fantasy in buying and building.
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