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Post by zorro on Sept 29, 2007 8:33:39 GMT 1
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Post by Carol on Sept 29, 2007 11:05:03 GMT 1
Croatia is largely immunised from a fall in prices resulting from the credit crunch due to the absence of mortgages until the last few months. It held the market back for the last few years.
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Post by rijekafan on Sept 29, 2007 11:37:12 GMT 1
I have noticed that it is harder for Croats to get home loans now. There seems to be alot of local buyers but they have become even more hard arsed regarding the prices they will pay. Do you guys think there is any expectation that prices have peaked or will go down in cities like Split or Rijeka?
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Post by Carol on Sept 29, 2007 13:47:58 GMT 1
There are three groups of buyers in Croatia IMO. 1. Domestic buyers who need a place to live 2. second home owners 3. investment buyers The second home owners are accused of pushing up prices, and they did at first but that was years ago. For the last couple of years they have been finding property too expensive. The only ones who borrowed to buy and could be hit be the credit crunch are those who re-mortgaged their own homes. The local buyers are the ones who pushed up Split prices and for the last two years they have been looking elsewhere for homes because Split had become too expensive when demand massively exceeded supply. So I can't see prices fall significantly in Split because as soon as they do there are a lot of people out there eager to live in Split.
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Post by darcy on Sept 30, 2007 11:15:17 GMT 1
Loans should be harder to get (and interest will go up), so there should be less buyers and sales must significantly slow down. On a top of that, people are not buying holiday homes if they do not feel confident, what is a bigger concern.
Prices will stay stable as long as people have stable income and they do not have to sell. Let's be honest, Yanks made another Enron, trying (again) to make some money from nothing and it did not work. I personally think this "credit crunch" is very good - if pushes the economy away from fatty food and back to healthy stuff – your investment should start to earn some money and there will be no quick capital gain.
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Post by rijekafan on Sept 30, 2007 11:37:55 GMT 1
God I wish you were in Rijeka Carol:)
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Post by Sasha on Sept 30, 2007 11:38:33 GMT 1
CRO daily Jutarnji noticed a new trend: some people in Zagreb sell their overpriced apartments and buy houses with gardens in nearby towns, and still have money left over. These towns (Sisak, Petrinja, Karlovac, Krizevci etc) have good rail, connections with Zagreb, only 45 minutes away.
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furio
Junior Member
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Post by furio on Oct 3, 2007 11:32:30 GMT 1
I think there will be a price fall in Croatia. Don't know if it will be more than 20% though.
Here is the thing few Croatians can afford property at current prices. The current price structure is fueled by foreign speculators/second home buyers.
Many of these foreigners have mortgages in their place of origin and have taken equity from their homes, especially in the UK, to pay for their Croatian property. When these people get scared, lose jobs, etc, they will unload secondary property. Now the thing is there is a much lower demand from new buyers due to stakiness in the global economy and they don't have access to easy loans like the earlier foreign buyers because of the credit crunch.
All you need is 5% of property holders to dump their properties for prices to go down very sharply.
So to wrap up if there is a sharp sell off there is little demand for buyers to acquire the properties at the current pricing. Also foreign buyers now have easier new markets to buy in Romania and Bulgaria with Montenegro being the current hot spot as well.
Prices will go down. How far? Debatable but I would safely guess 20% at least.
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furio
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Post by furio on Oct 3, 2007 11:37:08 GMT 1
Darcy,
While the US property market is shaky the UK is far worse. Additionally the average Brit has less savings than Americans in relation to debt outlay.
I think in a couple of years there will be very good buy opportunities in Croatia for prime real estate.
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Post by darcy on Oct 4, 2007 8:49:21 GMT 1
Furio,
Do not expect the prices will go that low, 20% is far too much, you know, when prices are low, supply drops as well. Property is not the stock market, you cannot dump it, get the cash and then buy it back. As long as the buyer can service the loan everything is fine, buyer is more likely to hold.
For Croatia, I hope reduced demand (I do not know about prices) will require better property management and holiday letting services - without you are less likely to sell. Whoever offers good property management to the buyers will win Croatian property market. This is my free tip. (I am too old to chnage my career, I am too young to retire.)
The Yanks made a big mess and let them mop it up first. They have some structural problems and they will need to work hard to clean it up.
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Post by anzac on Oct 4, 2007 12:23:05 GMT 1
One thing I found in Zagreb when we were looking for an apartment, was the people were selling old run-down apartments for the same price as new ones. We brought in a new building and the apartment is in fantastic condition. Many Croats are wary of buying in newer buildings it seems as they don't trust the construction. However, many of the older buildings we looked at in Novi Zagreb, Vrbani, towards Jarun way, were completely run-down, badly designed and had roaches and the buildings had lots of graffiti outside. We didn't look in the centre as it was rather pricey, although the apartments looked absolutely lovely.
I've been told now that prices for apartments have lowered in Zagreb since last year, but I've been keeping on eye on real estate advertisements and that's simply not true.
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Deleted
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Post by Deleted on Oct 8, 2007 5:35:03 GMT 1
IM AN AMERICAN............YES THERE ARE EASIER MARKETS IN BULGARIA, ROMANIA ..............BUT WHO REALLY WANTS A HOUSE 100 KM FROM THE SEA EVEN IF IT IS ONLY 8,000 EUROS. AND WHAT DO YOU DO SO FAR AWAY FROM THE HEART OF EUROPE IN EASTERN BULGARIA TO SURVIVE???
WHAT WILL HURT YOU IS THE EURO RISING SO QUICKLY..........FOR AMERICAN MONEY ANYWAYS........IM GETTING HAMMERED.......THE PROPERTY FOR ME HAS GONE UP MANY EUROS WAITING FOR PAPERWORK AND ALL THE NECESSARY STUFF AND A WHOLE LOT SINCE I STARTED LOOKING LAST FALL.
AND CAROL................IM NOT IN ANY ONE OF YOUR THREE BUYERS CATEGORIES IN CROATIA, AND NOT FOR INVESTMENT PARTICULARLY ................THIS IS FOR PRIMARY RESIDENCE, NOT 2ND HOME.........AND ISNT EVERY REAL ESTATE PURCHASE AN INVESTMENT ?.......... AND IM PAYING CASH NOT USING EQUITY. I KNOW ALOT OF PEOPLE THAT ARE INTERESTED IN YOUR AREA, AT LEAST THE COASTAL ISLAND AREA.
AND AS FOR THE YANKS MESS.........WORKED OUT WELL FOR ME............ASTRONOMICALLY INFLATED PRICES FOR LAND, I HAD A RANCH, PRICES 5 TIMES WHAT IT WAS 5 YEARS AGO, AND IN SOME CASES I KNOW OF 15 TIMES AS MUCH CLOSE TO AND OVERLOOKING THE WATER. I SOLD WHILE THE SELLING IS GOOD, BUT THERE ARE HOUSES GETTING FORECLOSED ON BY THE THOUSANDS AND ALL THOSE EMPTY HOUSES AT SOME POINT WILL DRIVE PRICES HERE THRU THE FLOOR, THEY THINK THERE ARE PROBLEMS NOW, LOL. THATS ALMOST FUNNY. ALREADY HEARING ABOUT PEOPLE IN DENVER AREA COMING UP WITH SHORTFALLS JUST TO SELL AND CLOSE..... FROM A LAWYER FRIEND FROM COLLEGE.......VERY SAD STATE OF AFFAIRS
AND YES ITS MORE EXPENSIVE THAN YOUR NEIGHBORS ON ALL SIDES ACTUALLY
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Post by Carol on Oct 8, 2007 7:59:59 GMT 1
You are right of course: there are more categories such as foreigners who want to buy their main residence (so far in all the time here I've met four such people through my agency in three years) or people who wish to retire here (I've met about ten). However the 3 I listed cover around 95% of buyers.
Yes everyone wants to make money, but an investment buyer is more specific, they ONLY want to make money and apart from that they couldn't care where or what the property is because they'll never live in it. So for investment buyers it has either got to be very lettable or has to go up in value.
Hvar is quite a good choice for a foreigner. Apart from being beautiful and popular (so good investment depending on the price you paid), its also got a lot of ex-pats for you to make friends with. I know you are going to scream that you intend to make friends with locals too, and no doubt you will but when you live so far from home, sometimes you just need to be with people who see the place as an outsider too.
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Deleted
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Post by Deleted on Oct 8, 2007 16:57:14 GMT 1
HI CAROL...............NICE TO MEET YOU,THOUGHT YOUD BE INTERESTED IN MY LOOKIN EXPERIENCE THERE FOR THE PROPERTY........ IM SUPRISED ACTUALLY THAT SO FEW WANT TO LIVE THERE JUDGING BY THE RESPONSES FROM EVERYONE HERE THAT IVE MADE AWARE. ALTHOUGH IF YOU ARE LOOKING AT PROPERTY IN CROATIA, MOST OF WHAT YOU SEE ARE VERY EXPENSIVE PLACES NOT MANY CAN AFFORD......THEY ARENT SHOWING THE REAL FOLKS PLACES, JUST THE TOURIST AND INVESTMENT RENTAL STUFF.............GORGEOUS HOMES OF STONE.........AND I THINK PEOPLE HERE THINK YOU ARE STILL IN SOME CONFLICT AS IVE BEEN ASKED SEVERAL TIMES, IS IT SAFE ?......ID WRITTEN OFF CROATIA AT FIRST CAUSE I DIDNT THINK I WAS RICH ENOUGH......BUT ITALY SEEMS TOO CROWDED AND MUZZLE LAWS FOR MY DOGS ENDED THAT IDEA IMMEDIATELY......500,000 EURO HOMES ARENT IN MOST OF OUR REALITY..............BUT MOST OF THE SITES I SAW PROPERTY ON SEEMED GEARED TOWARD U.K RESIDENTS AND WERE SELLING INVESTMENT IDEAS WITH PROPERTY MANAGEMENT, AND RENTAL PROPERTY, NOT 1ST RESIDENCE HOMES .
I FOUND AN AFFORDABLE PLACE.........IN THE HILLS OUTSIDE OF DOL ...............2 PLOTS......FEW TOURISTS OUT THERE, NO NEIGHBORS AND PINE FORESTAND OLD STONE BUILDING. I THOUGHT I MIGHT GET MORE OF THE TRUE CROATIAN LIFE OUT THERE, RATHER THAN STUFFED BETWEEN 2 VILLAS IN TOWN WITH NOISE. AND IN 5 MINUTES IM AT THE SEA ANYWAYS NOT IN TRAFFIC...... PLUS ROOM TO WALK AND HAVE PRIVACY.
AMERICANS DONT KNOW ABOUT IT THERE..........PEOPLES EYES POP OUT WHEN I SHOW THEM PICTURES. IT MAY AT SOME POINT BE IN SOMEONES INTEREST TO MAKE THEM MORE AWARE....SINCE IM NOT THE ONLY ONE TIRED OF THINGS HERE.... AND SINCE ALREADY 2 FRIENDS OF MINE WANT ME TO LOOK THERE FOR THEM WHEN I GET THERE.
IF I CAN EVER OFFER HELP TO SOMEONE ABOUT ANYTHING IN THE USA , LET ME KNOW..............MY NAME IS TIM BY THE WAY.......:>)
I DO NOT SPEAK THE LANGUAGE, BUT IM GOING TO LEARN.
I CHOSE HVAR SO I COULD SELL MY WORK OUTSIDE AT THE MARKETPLACE AS WELL AS ITS BEAUTIFUL......WORKING IS IMPORTANT, LOL..... I DONT THINK THE OLD PLACE I BOUGHT APPEALED TO MANY BECAUSE OF NO ELECTRICITY AND OLD WELL.........AS WE SAY HERE POWER BRINGS PEOPLE, LOL.......IVE LIVED OFF-GRID FOR 20 YEARS..... FOR ME ITS PERFECT.
AGAIN NICE TO MEET YOU..........AND TO READ WHAT YOU HAVE TO SAY...........ITS HELPFUL TO LEARN SOME BEFORE I ARRIVE...........IM BRAVE, BUT NERVOUS A BIT.
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furio
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Post by furio on Oct 24, 2007 13:05:18 GMT 1
Darcy,
To start of the Brits invented the entire SIV (Structured Investment Vehicle) concept and abuse it the most which is the root of the debt problem. The reason why there are so many subprime mortgages in the US is that the Brits among others were very keen to buy them, securitize them into bonds, and sell them to punters around the world. London is the world's biggest bond market. Why do you think there are runs on English banks?
That being said there is a debt crunch developing around the world due to these bad debt products out on the market which are slowing down the property markets in UK, US and Ireland and make people think if they want to pay insane prices. As shaky as the US property market is people are even more in debt in the UK.
Simply put if (and they will) prices go down in UK, Ireland, US then people will stop taking out second mortgages to buy second properties. Many who are leveraged out will look to sell them. We all know the pain it is to do things in Croatia and that the property market there has already been in decline for the past two years. If you have more sellers than buyers then prices drop to a point where buyers feel it is worth it. Just because something becomes a little bit cheaper does not mean it is a bargain.
Property in Croatia has already dropped by 20% in the past two years. I expect we will have at least the same in the next three years. There are no reasons why it shouldn't. What can go up can come down if the fundamentals are wrong and there are no buyers.
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