|
|
Post by rijekafan on Jun 10, 2007 9:41:38 GMT 1
Here is an extract of an alarmist report from Croatia today:
According to the Croatian tax administration, a total of 12.578 real estates were sold in the first quarter of this year, out of which residential real estate counted for only 4.408 sale contracts,'Croatia Today' reports.
Since real estate agencies claim there are no oscillations according to the quarters, simple calculation states that there will be mere 18.000 flats and houses sold this year, while even the most optimistic estimate of 25.000 sold flats this year falls sharply behind the worst in the past ten years – the year 1999, when only 38.416 flats were sold.
The year 1999 was the worst according to the overall number of sold real estates – 72.453, while this year's number of all sold real estate would reach between 50 and 60.000. According to Croatian real estate experts, poor sales can be attributed to the lack of quality offer and exaggerated prices of poor quality real estates. Another indicator of the poor situation in this sector is in the fact than many real estate agencies had to close permanently.
|
|
|
|
Post by Carol on Jun 10, 2007 10:34:55 GMT 1
The agents in istria are claiming the market is bouyant but that is not the case here in dalmatia. find me an agent in dalmatia who says they are getting lots of sales compared to previous years and i will show you a liar!
|
|
|
|
Post by rijekafan on Jun 10, 2007 14:38:43 GMT 1
Carol, as you would remember, In previous posts I mentioned a slowdown in Kvarner and others said that Istria had cooled off. You have just confirmed that the slowdown has affected Dalmatia. I wonder if the market there, suffers from the same illnesses as in Kvarner and Istria. Before I mentioned that it was getting harder for locals to get credit but I guess the main problem is most properties are overpriced. I dont know about in other places but in Kvarner there are lots of interested buyers but alot of them are insisting in serious price cuts. Apart from Opatija, most of the Kvarner buyers are domestic wheres I assume in Dalmatia and Istria foreigners are the main buyers. If there are interested buyers in these markets but they aint buying then one would assume that most of the available stock is overpriced.
|
|
|
|
Post by irac on Jun 11, 2007 8:13:14 GMT 1
I think the report is pretty spot on. Coastal properties have gone from being hot to overpriced and ovedone in the space of a year. Last summer the talk in most places was the crazy prices being sought for sub-standard properties, this summer there's no talk at all. Even tourist figures are down, for May (just saw them at this morning's get together) Vodice rentals are down by a quarter, south of Split by a little more and the Zadar area by just over 10% (this contrary to my colleagues belief that Ryanair will make his lot rich!).
There's a serious oversupply and prices are out of step with what is sensible. Add to this the mortgage rate rises in Ireland and the UK, with the current move by Germans to further afield, then a lot of agents will have to start NOT charging for viewings and try get vendors to realise their patch of rock is not gold.
|
|
|
|
Post by Carol on Jun 11, 2007 8:41:17 GMT 1
"try get vendors to realise their patch of rock is not gold" this is the part where it would be easier to move mountains. last week we had a vendor whose properties has been on the market unsold for at least three years raise his price by 115%. we thought of explaining to him but knowing the character we thought why waste our time so we delisted it instead
|
|
|
|
Post by darcy on Jun 11, 2007 8:48:39 GMT 1
Do you know, why people are selling their houses? If they are selling to buy somewhere else, then sale should be easy. If they are selling to patch their budgets, then, of course, it is a hard business ...
|
|
|
|
Post by jill on Jun 11, 2007 8:57:37 GMT 1
I think the report is pretty spot on. Coastal properties have gone from being hot to overpriced and ovedone in the space of a year. Last summer the talk in most places was the crazy prices being sought for sub-standard properties, this summer there's no talk at all. Even tourist figures are down, for May (just saw them at this morning's get together) Vodice rentals are down by a quarter, south of Split by a little more and the Zadar area by just over 10% (this contrary to my colleagues belief that Ryanair will make his lot rich!). There's a serious oversupply and prices are out of step with what is sensible. Add to this the mortgage rate rises in Ireland and the UK, with the current move by Germans to further afield, then a lot of agents will have to start NOT charging for viewings and try get vendors to realise their patch of rock is not gold. Exactly the same market trends here (Italy) last year, and for the same reasons, prices rose beyond reason - bloody awful year for us. However, things are on the up again this year and I think some of the vendors have had a reality check are prepared to accept realistic offers. We have been as busy as previous years and the foreign market for property in Umbria and Tuscany seems to be moving again. I'm sure the same will happen in Croatia but maybe the back end of this year or 2008. |
|
|
|
Post by irac on Jun 11, 2007 11:54:02 GMT 1
I think Darcy has it right, they'e not selling to buy elsewhere, but selling to get money, and too often I've seen people selling off little bits of what has been passed down and then the money flows away in an instant. I believe the market is different here than say, Ireland. There people buy to trade up, here it's just to keep things ticking over instead of to re-invest (I'm being horrifically general here I know).
|
|
|
|
Post by darcy on Jun 11, 2007 12:24:39 GMT 1
I would never blame the guy who is trying to get the top dollar - even if he looks stupid and greedy, by looking at the case Carol presented. However, I think Carol did the right thing and her business in not a charity.
People in Croatia are doing tough because they fell a victim of their lifestyle, completelly unsupported by their economy.
|
|
|
|
Post by rijekafan on Jun 11, 2007 16:49:33 GMT 1
Do the people here with Istrian and Dalmatian experience think that there is still strong demand but buyers are waiting for prices to go down?
The next vital question to me is was does represent a sustainable price per m2 for various classes of croatian property? In Mali Losinj I am doing a conversion into a shopfront and an office. The development is located about 70m from the water and the epicentre of the town. Each property will be about 30m2 but the shopfront will have a 20m2 courtyard located in the fomer cistern area.
I am aiming for E 2200 per m2 for the shop and 1900 per m2 for the office. I really hope this represents a realistic price. If it does not, I think the the market really will is up sh.t creek.
Agents charging for viewings, I still find that incredible!
|
|
|
|
Post by irac on Jun 11, 2007 17:24:27 GMT 1
No, I believe the demand has gone down. Even the number of enquiries have slumped from 2-3 per day to half a dozen a week. I know that since the start of May our 3 property folks have had about 4 clients visit between them, I don't know how it is for the rest of the summer, but it could be low.
Last summer I'd to help out a number of times and the summer before we were snowed under, but at present, it's poor.
Whatever price, Rijekafan, you have for your office and shop, check out local rental returns and see if it's year round, if not then the prices you're looking for might well scare off reasonable buyers, even renters. Just a suggestion.
|
|
|
|
Post by Carol on Jun 11, 2007 22:33:05 GMT 1
this forum is as a good a barometer of buyer interest as I know. Look at the number of responses to the thread last week saying mortgages are available at last and compare it to any property thread in 2004. demand is way way down!
|
|
|
|
Post by rijekafan on Jun 12, 2007 5:04:14 GMT 1
Thanks for the advice Irac. I did check demand and there is a shortage of prime commercial on the Island. Demand is year round. I am hoping fact that in absolute terms this will be the cheapest commercial real estate on the island will help. Im looking to sell as soon as it goes into the land book rather than keep the place. I will try to buy the cistern and the okucnice from the communal whatnot. I have found that Croats do not really count available space as being part of the place. Eg in Rijeka the balcony was not on the title but no one else could ever use it. I could not sell it until I convinced a buyer that the space had a value despite not being on the title. Despite the option, no one ever seems to try to buy bits of their okucnice despite the fact that it can offer good returns and can financialy benefit the neighbours. I will be facinated to see how the neighbors react.
Like Rijeka I chose Mali Losinj because of the people as much as the position. They seem the mildest and most sophisticated of all the Adriatic Islanders and Mali Losinj is in fact the largest Island town in Croatia which creates demand for commercial space for lawyers and so forth. Rijeka was a hunch that came off, I just hope I am right about Losinj. As for real estate on Cres and Losinj, rip off prices mean that sales have come to a standstill. Prices are being lowered but not enough to clear properties. The critical shortage of building land should help demand but my project will live or die depending on cost control and pitching it to right market. I have taken calculated risk to try something new and if it fails then I only have myself to blame.
|
|
Nick
New Member
Posts: 8
|
Post by Nick on Jun 12, 2007 21:23:57 GMT 1
This is an interesting forum. We have had this chat in real life many times with our colleagues.
I guess the situation currently in Croatia is, at least, quite explainable. With an extremely untransparent land register and zoning situation there is simply no quick money to be made by international developers.
This is unexpectedly exactly the result Croatian authorities were aiming for when the new coastal ecological laws were adopted. No new large resorts at the coast and no sociological impact on existing village structures.
So Dalmatia is left with a market of, still, higher demand than offer. The home owners of existing houses dictate the prices as there is no competition from new developments. They'd better try to sell now as the competition, once it gets build, should be qualitatively superior.
Still there is no expectancy of price decrease. It's simply not logical for existing home owners to lower their prices.
|
|
|
|
Post by rijekafan on Jun 13, 2007 1:52:05 GMT 1
Sorry Nick but I have to beg to differ on a few things. I believe there is some superb opportunities for international developers but for industrial properties over 2 million Euros. In the residential area the pickings are very slim. As for zoning issue, my local council here in Australia is much harder to deal with than the Rijeka City Council which has a special office to help foreigners. The rules are insane sometimes but the council always does their best to help.
As far as development controls on the coast go, they dont exist for people with the right contacts. Look at all the ugly new sh.t on Cres, Rab and Pag and clearly the rules mean nothing. I assume that this ugly crap is also being built in Istria and Dalmatia. Finally it is the buyers not the owners who set the price of real estate. A place is only worth as much as it can be sold for.
|
|
