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Post by rijekafan on Apr 26, 2008 12:24:30 GMT 1
The real estate market in this part of the world is in crisis. In Rijeka last year there were 200 flat sales a month, now the sales figures are 50. Agents will be falling like ninepins soon. On Losinj nothing is selling because owners have dumb price expectations. If one wants to sell in this market, the property must be less than 100k Euro. This is the market I am going for. There are plenty of buyers here but no rational sellers. Most of the buyers in Rijeka and Opatija have deserted the market. Prices will plummet if this goes on as sellers become desperate.
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Post by 3lions on Apr 26, 2008 15:11:28 GMT 1
Its about time the property market in Croatia was brought down a peg or two.
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Post by panason on Apr 26, 2008 19:58:59 GMT 1
i think this post is a tad over the top the whole of europe is up for price correction your house is only worth what someone wil pay for it and this has always been true times are tough and its time for the tough to get going
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Post by 3lions on Apr 26, 2008 20:19:04 GMT 1
I'm not so sure, everything is overpriced in Croatia, so they maybe in for a bigger fall than most. Also people there have little experience of credit and now they a diving in head first. May not be any water.
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Post by valiant on Apr 26, 2008 20:28:12 GMT 1
yeah...most sellers do have dumb price expectations. in the vast majority of instances you can buy some land or a property with a view and thats basically all you get for your money. you have to battle for infrastructure. roads are crap if you even have a road, rare to find a good neighbour, paper work is a nightmare, unemployment is high, its to difficult to open and run a business, too many taxes for everything...so i dont know whats keeping the prices so high other than neighbourly chit chat and jelousy, and the building mafia. the thing is if 10.000 people are selling ford escorts, and they all agree on some ridiculous common sale price, then anyone who wants to buy such a car has to pay an unrealistic amount, that has nothing to do with anything. it could be 50.000 euros, and if you want one, you have no choice but to pay that much for it. thats the property market here.
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Post by 3lions on Apr 26, 2008 20:38:12 GMT 1
The man that built my apartment has now become the local president of the HDZ, can you believe it. My war vet mate took the p*ss out of him so much. Even my kids call out his name in mocking jest. Oh what fun, fun fun fun all the way to the airport departure gate. ;D
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Post by valiant on Apr 26, 2008 21:12:44 GMT 1
yeah see that.... unbelievable. i know a guy who joined a political party, they like him so much that they created a position for him in some office, so he basically has a "stolica" and does some made up job and gets paid for it. it is truly amazing. a but what can anyone do, thats just how things are in cro, we talk about these things but nothings getting better. anyway...3 lions..you look like something or someones P'd you off recently?
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Post by 3lions on Apr 26, 2008 21:49:21 GMT 1
I'm afraid its true, I'm sorry to take it all out on here, should control myself. It may all be in the press soon. Anyone out there a ground breaking journalist, get in touch.
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Post by rijekafan on Apr 27, 2008 10:27:44 GMT 1
i think this post is a tad over the top the whole of europe is up for price correction your house is only worth what someone wil pay for it and this has always been true times are tough and its time for the tough to get going I beg to differ.When sales go from 200 a month to less than 50, that is more than a correction. This has not happened since the war. Real estate agents here are depondent
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Post by irac on Apr 27, 2008 13:50:33 GMT 1
There is a very real problem with real estate in Croatia. My colleagues who deal with it have remarked that domestic sales (a very strong indicator over the past 5 years) were more than 30% lower in 2007 than 2006, and so far this year it's down half than the first quarter of 2007 (which was weak also).
It's not alone the drying up of "easy credit" for foreigners, nor is it that locals are uninterested, it has more to do with the quality of product on the market, prices being asked and low chances of resale.
What has been causing a problem, imho, is that sellers too often are unwilling to sell, and the longer their property remains on the market the more they want for it. It's been discussed often enough here and described perfectly by someone working intimately in the field (Carol) that no matter how much sense a person tries to talk, owners (however tenuous) prefer to listen to drinking buddies, neighbourhood lies, or what it says in Jutarnji/Slobodna/24 etc than what is actually sensible.
I can't see the market improving in the next 18-30months as infrastructure is still poor outside of Zagreb, prices have no value and this nonsense of EU entry is well and truly overdone.
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Post by mambo on Apr 27, 2008 20:12:30 GMT 1
Well, good to see that my predictions are finally becoming reality. I think I have been predicting this for over 2 years now and I can still remember some people over here telling that the prices were extremely low and that Croatia would be spared. Forgive me for saying, but if the world turns into a mess I see no reason why Croatia would be spared, in fact, a second home is the first thing to go out of the window once a crisis starts. In other words there is absolutely no reason why Croatians or anyone else should start complaining when you could have seen this coming from light years away.
I still remain with my point of view that the future of Croatian tourism lies with the low cost tourist and this means offering rooms, cars and entertainment in this sector. Still cannot believe that some idiots in Croatia think the higher end market is the road Croatia should take. Curacao, in the Caribbean, only became popular when the USD went down the drain. At that moment Curacao became accessible to European tourists and the place is thriving at the moment. Why is it so difficult for people to simply look at other parts of the world and learn from their mistakes ? Why do they insist on making the same mistakes themselves ?
That is something which is far beyond what I can comprehend.
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Post by Carol on Apr 27, 2008 20:23:58 GMT 1
Sellers are stubborn, sometimes (often) cutting off their noses to spite their faces. Saying that about 5-10% of our sellers have trimmed their asking prices this last few months. However the stubborn attitude is sort of holding the market back and sort of propping it up all at once. I'd be interested to see what would happen if people did wake up one morning thinking that their property might be worth less next month than it is today. Would they panic ? It would be interesting to see, but as i am in the market I strongly suspect that it would also be a painful experience personally.
To be fair mambo, you say everything (except ice) is over priced and over rated unless it is aimed directly at the budget buyer from slovakia or poland.
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Post by mambo on Apr 27, 2008 20:44:19 GMT 1
Carol,
Not all is overpriced in this country, that would be overdoing it, but especially tourism and real estate are heavily overpriced if you compare it to the average salary here in this country.
How would you want to justify 100 euro a night for a room or even a portakabin on a campground when their are still people who earn around 400 euro per month net ?
Comparing prices to Western Europe is not possible since the standard of living in this country is far below that of countries like England, Holland, Germany etc. Welfare, Medical care, road structure, unemployment benefits, social care, education etc is not even a shadow of what is available in other countries, where it is mostly financed by the state.
Pricing of e.g. labor is far below what is normal in Western Europe, yet we don't see that in the prices some companies charge for their services, which can only lead to one conclusion.........the difference goes straight in the pockets of the owners of the companies. That may be alright if you have a very strong economy, but in a fragile environment like Croatia more regulation should be in place. The prevention of long term damage to the country should outweigh the 'free market' arguments of some of the 'sharks' out there.
Real estate, tourist accommodations etc are indeed heavily overpriced and I have been saying this for a couple of years now. The fact that you get some super rich tourists, buying all the real estate they can lay their hands on does not mean that this is automatically the real value.
Managers of large tourist companies (Plava Laguna, Valamar etc) defining the prices for the new year simply by sticking the thumbs up in the air..............I am sorry, but that is pretty amaturistic if you ask me. It is also the best guarantee to go bankrupt in a couple of years, which would endanger a whole sector of the Croatian economy.
If this real estate market is going to collapse it is going to be more than just a few real estate agents who will feel the pain. We should then also be looking at construction companies, engineers, building material suppliers, banks (remember the US ?) etc. I don't know whether it will get to this, but when Croatia keeps acting like a third world country they will stand a good chance of getting into a situation like that.
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Post by Carol on Apr 27, 2008 20:59:28 GMT 1
You've been reading too much Slobodna Dalmaciji though if you really do think that there are super rich tourists, buying all the real estate they can lay their hands on.
this country is already staggering under the weight of the regulation and the resulting bureaucracy. it sometimes seems that there is a government devised formula for everything. I think you could halve the current level of regulation and it would still be very far short of a free economy.
I would agree though that there is little awareness of market forces when setting prices. We need a benevolent dictatorship.
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Post by Valleycat on Apr 27, 2008 22:00:03 GMT 1
This has not happened since the war. Real estate agents here are depondent depondent Did you mean despondent?
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