Property Price Crash

[justapixel]

solitum said:

well spoken - exactly the point

Agent will benifit - The market will become alive
Seller will benifit - (his estate will actually be sold)
his son will benifit (He will get appartment and better chance for a job)
buyer will benefit - (He will get property at the real value)

So you think only the buyer will benefit?

Joking aside, there are far too many reasons why property tax in Croatia will never be established, or at least not in next 20 years.

.

[darcy]

solitum said:

well spoken - exactly the point

Agent will benifit - The market will become alive
Seller will benifit - (his estate will actually be sold)
his son will benifit (He will get appartment and better chance for a job)
buyer will benefit - (He will get property at the real value)

In Croatia it does not make any sense. I was thinking same as you, but do you know how difficult is to save 50K EUR difference between asking 200k and realistic price 250k in Carol's example? 5 or 10 years. So, if he can't sell now for 200k, he will sell in 10 years time for 250k. Maybe even 275k.

Simple.

[solitum]

justapixel said:

So you think only the buyer will benefit?

.

UPS correction is made

I sincerely hope that this will not take 20 years, but i fear that will be the case

[mirabelle]

Most and I say most Croatians in our seaside village are multi-homes owners, mostly inherited and I don,t think the tax would go down too well. Croatians may not be cash rich but certainly assets rich.

[justapixel]

darcy said:

In Croatia it does not make any sense. I was thinking same as you, but do you know how difficult is to save 50K EUR difference between asking 200k and realistic price 250k in Carol's example? 5 or 10 years. So, if he can't sell now for 200k, he will sell in 10 years time for 250k. Maybe even 275k.

Simple.

Yeah if you're saving from your income. But if you're reinvesting the money it's a different story. Even with meager 5% from a bank savings account, you get your €50k in 4-5 years. In last few years (except last 6 months) average income from Croatian stocks and funds was 40-50% a year...

Not to mention that inflation is eating your money and 250k in 5-10 years is worth less than 200k now...

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[Carol]

i agree with each of you to an extent but I don't think property tax would be accepted by croats and it would just lead to the property records getting into a mess again. They are only just getting sorted out now from the last time the state tried to dictate who should own how much.

Why does everybit of income have to be earned via tax in Croatia? What is wrong with encouraging entrepreneurship rather than discouraging it? Growing the economy rather than trying to shrink it

[IgorG]

quinne said:

i agree with each of you to an extent but I don't think property tax would be accepted by croats and it would just lead to the property records getting into a mess again. They are only just getting sorted out now from the last time the state tried to dictate who should own how much.

Why does everybit of income have to be earned via tax in Croatia? What is wrong with encouraging entrepreneurship rather than discouraging it? Growing the economy rather than trying to shrink it

all of this is true, we have enough taxes , "who is this PDV and why does he have all of my money?" ;D

info for all, there are some new laws in preparation, considering real estate that is not being used (building plots, and agricultural plots) and non residential homes, for foreign and domestic owners, you will see high tax on non used building plot... this is prepared in current building law and plans, as you can see in a part talking about new building regions being used after current building plots have been built.

[solitum]

agree with each of you to an extent but I don't think property tax would be accepted by croats and it would just lead to the property records getting into a mess again. They are only just getting sorted out now from the last time the state tried to dictate who should own how much.

Why does everybit of income have to be earned via tax in Croatia? What is wrong with encouraging entrepreneurship rather than discouraging it? Growing the economy rather than trying to shrink it

Hi Carol, then I really think you missed the point, as this was actually the main point, move tax away from work and to other things like property, so that Croatia would be come interesting place for foreign investments which could generate NEW jobs.

And because it is not accepted, it does not make less right, people only see from day to day and act like that. So as I mentioned earlier, somebody has to explain them that to make economy grow you need more jobs created, which e.g. are making goods and services which can be exported, to do that you need cheaper cost of labour, as you can not pay people less the today (the actual needs much higher payments to have them consume more), so you have to remove the taxes, for this you need to have tax income from somewhere else

[IgorG]

about valuations on properties...

we are court appointed appraisals of property, most of our business is done with courts, banks, and government (local)...

but some times people ask as to make appraisal on their property for purpose of selling it. After we make it they are usually angry and they trow it away and start selling at their prices, but after a year or so, they sell it close or lower than our apraisal....

there is an old saying for Zagorci: "they are all born with high school degree so everything else is just a bonus"

I think this applies to all Croatians (including me) ;D ;D ;D

[happy]

So, with all of you experts out there ............

Will there be a property price crash in Croatia?

[IgorG]

There will NOT be a great price chrash.... some corrections, most of them on low quality apartment, and flats in cities and towns, prices for this real estate are at their maximum...

land and building plots, have to correct also, but this is due to plans and new law, only plots with sure! building permits can have high prices, when investor has to work hard to get a permit then price must go down...

houses prices are stable, even low in continent... only market has to grow a bit, and than you can see a realistic price on good vs. bad houses..

[irac]

I agree with Igor, prices won't crash, just remain the same for a while and then balance out. There is a huge amount of unsold property out there and it's not only lack of interest that's hurting the real estate market, as was stated above (most clarly by Carol I think) is the unrealistic ideas possessing some folks. The madness and lack of intelligent thinking that has possessed the coast is also present inland.

I feel sorry for my colleagues who deal with property solely, they have nightmares trying to set realistic prices, negotiate deals, and account for "cousins" who pop up to put in a bid when the deal is done.

It won't change short term, and getting an alliance of real estate agents will also not help right now so long as there is money to be made and not counted.

[happy]

Irac, Igor,

I guess you are right. Property prices in Croatia will not be affected by the global economic climate.

Just look at the large number of unsold property in Croatia which have been on the market for 3,5,8 or even 10 years. It never occurred to the sellers to drop their asking price in order to move the property!

I suppose if you wait long enough, EVENTUALLY, you will get the asking price.

20/30 years is a long time to wait and remember there are no shops and car showrooms in cemeteries!

[Carol]

Happy, I don't think it is all or nothing i.e. either the prices will crash (a very strong term) or they will be completely unaffected. I don't believe they will crash either, mostly because the % of foreign owners is still relatively small. To see what some people on this forum write, you would think that the foreign owners dominated! Foreign owners tend to be the more sophisticated. They know about demand and supply but the croatian owners by and large are guided by Slobodna Dalmaciji newspaper (The Sun equivalent) which still peddles stories about how foreigners are taking over Croatia.

[happy]

quinne said:

Happy, I don't think it is all or nothing i.e. either the prices will crash (a very strong term) or they will be completely unaffected. I don't believe they will crash either, mostly because the % of foreign owners is still relatively small. To see what some people on this forum write, you would think that the foreign owners dominated! Foreign owners tend to be the more sophisticated. They know about demand and supply but the croatian owners by and large are guided by Slobodna Dalmaciji newspaper (The Sun equivalent) which still peddles stories about how foreigners are taking over Croatia.

You mean like they wrote about some Russian who bought a villa for millions of Euros near Dubrovnik, UNSEEN.

Now all ruins up and down the country are worth millions!

I wish the value of my London house goes up everytime I read in The Sun about some rich Russian or Arab who bought a house on The Bishops Avenue for 50 million pounds.