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Post by choink on Oct 4, 2008 19:14:14 GMT 1
the economic reality is that economics may have something to do with the prices and availability of apartments. but houses along the coast have never had anything to do with economics, its all about stubborn headed owners who want to meet you before they tell you how a barbaque area is planned, how a garden and drive way is planned, and then how much the house costs, so that they can bring you in slowly, instead of sending you straight to the shock soba.
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Post by solitum on Oct 6, 2008 23:49:56 GMT 1
The Croatian property market is to a large scale not impacted by the "credit crunch"
Why not! Main part of land and buildings hold are paid – NO mortgage
When you add to that that there is no recurring property tax exists I don’t see and reason for owner to sell? Do you?
So I fully agree with Sksk – property tax would kick start the market I actually believe It is the only think which can get the market going.
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Post by mambo on Oct 7, 2008 10:29:06 GMT 1
Solitum,
You are correct when it comes to the houses which have been in the family for many generations. However, there are more than enough houses/apartments which were built where houses like that (the ones that had no mortgage) were used as collateral. Then we have the loans which have to be paid back 2 years after the project is completed. And then we have of course the projects which were financed by real estate developers, hotel chains etc.
When the housins market collapses.......which it will, all these people will get into trouble, so I expect a lot of houses being taken back by the banks and offered for sale in auctions. Problem is that Croatians don't have money to buy them (the houses were aimed at the foreigners), so who is going to buy these houses ? With such a small market many banks will get into trouble and I expect bank failures quite soon in Croatia. The government cannot guarantee unlimited savings, so we could be in for a total collapse of the Croatian economy.
This may sound harsh and overstating, but this economy has always been fragile and it cannot handle an enormous crisis like we are having at this moment. If this crisis continues we could see a dramatic turn in tourism next year, building permission requests are already down by 28 %, so if the governments is going to state they did not see this coming they should not be in office.
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Post by Madgolfer on Oct 7, 2008 11:33:20 GMT 1
Its already happening Mambo !
The list of "bank owned" properties going through the auctions each month is much higher than it was 6 months ago. Given how long it takes to actualy get possesion, sort out the paperwork and such like, it seems to me that this has been on the up for well over a year.
OK if you have the cash you can pick up some nice cheap places, but unfortunately there is usually a sad story behind each one.
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Post by mambo on Oct 7, 2008 11:59:02 GMT 1
To me there is no sad story behind it. I have 0 % pity with greedy Croatians/builders who thought they could have a quick buck by not thinking and building something which foreigners did not want. If they are so greedy that they refuse to sell something for a lower price and the result is that they get stuck with the apartment/house then I am sorry, tough luck for them.
Why do people always think that 'the trees grow until heaven' (as we say in Holland) ? Here in Istria I see apartments/houses for sale or being constructed and the only thing I can think is: 'Who in his right mind would ever want to buy this ?'
Why is it so difficult for locals to first do a very simple test ? Would I want to have an apartment like this myself ? If the answer is NO, then chances are that foreigners also don't want to have these apartments. When you then take into account that prices of houses have risen with 89 % during the period 1997 - 2007 of which 16 % in 2006 and another 13 % in 2007 you do not need to be a rocket scientist to figure out this won't go on forever. However, the locals thought they could continue building cheap houses and sell them for fortunes. Now with the credit crisis they are stuck with their buildings. Instead of unloading them against lower prices they prefer to wait until the bank takes over.
However, basically we are now having the same problem as in the US. People received mortgages while they should not have received them. Yes they had collateral, but what is the bank going to do with this collateral ? Sell it ? To whom ? And in the mean time the banks still need cash to pay off their own loans. When they don't get paid they may sell the house, but that is a long term process, it does not solve the problems of the banks..........having to pay their own loans.
End result ? Banks will collapse
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Post by mambo on Oct 7, 2008 12:07:20 GMT 1
And here is some other nice information, does not make you happy either:
and
and
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sksk
Junior Member
Posts: 12
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Post by sksk on Oct 7, 2008 16:24:47 GMT 1
The great credit unwinding has happened very quickly since I first started this post. As absurd as this may sound, the EU banks face even worse prospects the the US banks. For starters, EU banks operate without transparency. No one knows what toxic, dodgy loans they have on the books. Secondly, they greedily devoured US SIVs and other bundled mortgage investments, turning a blind eye to loan quality while pocketing a less then one percent increase in yield.Thirdly, the EU is a political mess. No consensus. Ireland and Germany acting unilaterally. And potential unraveling by the aggrieved states.
Amidst all this, second home buying in Croatia will come to a stand still. Banks won't loan to each other let alone to Dalmatian second home buyers. The Brits and Yanks will disappear. Why even the Russians have taken it on the chin.
Previous posts regarding Croatians using their family home as collateral strike me as very worrying. The fact is, Germany can weather a hard recession. But can Croatia?
I think the silly days are over. Croatians will be forced to sell to raise capital. And buyers will disappear. It's going to get ugly. Which is good news for the odd buyer who actually has cash on hand. If there are any.
-SK
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Post by ray51 on Oct 7, 2008 16:47:22 GMT 1
( as disgusted as I am ! ) with the shopping assortment/pricing and medical/pharma services currently on offer in HR , yupp , I might be a cash buyer , yet ! Have you any serious , motivated sellers
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Post by choink on Oct 7, 2008 21:55:55 GMT 1
croatia is has a unique economy, at least thats what i rekon. i seriously dont see the prices of croatias coastal houses ever going down. no matter world recession, great depression, ww3. stubborness. you dont want the neighbiour telling you you sold your house cheap. theyd rather brag about ripping off a buyer.
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Post by Madgolfer on Oct 8, 2008 8:23:26 GMT 1
Choink, your post.....
"stubborness. you don't want the neighbor telling you you sold your house cheap. they'd rather brag about ripping off a buyer. "
This point has been raised many times, I posted one such example last week, but you must realise that Croatians are no different to everyone else in the world.
Its simple enough, those who need cash will reduce the asking price of their property, those who don't will sit it out.
Put yourself in their position and think again. I think a lot of the posts on this forum saying how "stupid" or "greedy" Croatians are when it comes to selling property are arguing from the perspective of a buyer.
Just because "you" want them to reduce their price does not mean that they have too. If they perceive their property market to be something completely different to you, so be it. It may create a stagnant market and probably a dormant market over the next year or so, but it is their choice. Its "their" market after all.
As someone directly involved in the property market, I see what is happening and while it may seem "stupid" to some people, they should stop complaining and move along the road to another seller/property until you find a deal you do like.
Its very close to (if its not already) a buyers market in Croatia, for those who have the cash and do not get emotionaly involved.
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Post by Carol on Oct 8, 2008 8:40:50 GMT 1
I think the problem you and I face Madgolfer is sorting the wheat from the chaff. In my mind there are three groups of sellers:- 1, Those who want to advertise but not sell. 2. Those who want to sell but only for a high price. 3. those who want to sell (would prefer a high price obviously but will still sell anyway if a buyer paying a high price cannot be found).
The problem is that they all contact us at first saying the same thing ("I want to sell and this is the <high> price i want"). Working out which of those "sellers" fitted into the 1st category was always an issue for any agent who is not a mind reader. However we all tried our best i think because they just wasted or time and money. The second category used to still get sales when the market was buoyant, so it was harder work and took more luck but it was do-able. I don't think it is do-able now because it is a long time since I saw a buyer who was price insensitive. The third category are the best clients at all times but especially today because however demanding they may or may not be, at least you've got a fighting chance of putting a deal together to sell their property. The market though will stagnate until there are sizeable numbers in the third category or the market changes direction again. Do you agree?
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Post by Madgolfer on Oct 8, 2008 9:11:53 GMT 1
Morning Carol,
I agree with your comments, but for those who do not know our "locations" we should perhaps point out how different our two markets are.
The coastal property market is a world apart from the inland regions at the moment, so a direct comparison would be unfair.
Having said that, sellers and buyers everywhere have the same fundamental objectives, they are all looking to do a deal of one sort or another, be it in any of the three categories you listed;
1, Those who want to advertise but not sell. 2. Those who want to sell but only for a high price. 3. those who want to sell (would prefer a high price obviously but will still sell anyway if a buyer paying a high price cannot be found).
We do not perhaps get as many sellers in category 1, as you. There are some but not that many and we can usually whittle them out early on. Its our choice after all if we choose to advertise a property or not, no one is forcing us to,
Category 2. is probably the hardest. A high price is relative only to the buyer, if they perceive the price as reasonable they will buy anyway if they want a particular property bad enough and they are the ones who tend to get "emotionally" involved.
Category 3. makes up the majority of both our markets I am sure. These are just genuine, honest sellers who are prepared to negotiate on price and the ones who will usually get a quick and easy sale.
One main difference between our regions is perhaps that we also sell to the domestic market. Croatian buyers tend to be less emotionally involved and know that if a price is unrealistically high they can just move along to the next suitable property 500m down the road.
I'm not blind to the fact that some buyers must have "that" particular property and only "that" property, so will sometimes pay a higher price. If foreign buyers can be persuaded to look at the transaction from more of a "business" or "investment" perspective, only those properties in category 3. would sell and eventually Cat 1 and 2 would decline.
Sounds simplistic I know, but sometimes the whole thing just gets far too complicated.
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Post by Carol on Oct 8, 2008 10:31:11 GMT 1
It is true that the inland market is quite different from the coastal one, but we do sell to locals too (have just started a series of ads in mali oglasnik and slobadna dalmaciji for instance). Local buyers are less emotional. saying that I've had tears from a young couple in my office when they turned up to sign a sales and the sellers daughter came wading in to demand that the whole deal be called off as she'd heard the details and wanted her father to get 20% more (the house is still for sale by the way, though not through us since that day).
Almost everyone puts their prices high and they all seem to think it is a good idea to bluff the agent with phrases like "we are not in a hurry" or "its not a fire sale". Sometimes this is true and sometimes not. The only acid test i know is to bring a buyer who makes an offer and wait for the seller's reaction. If they refuse and put the price up then yuou know it is a category 1 seller and you may as well cut your losses immediately and take the house of your books. If they are willing to negotiate then its a category 3 seller. If they hold firm then its a category 2 one. The only problem is that the buyers get fed up having to go through this (which costs them money for flights and hotels plus time) and for most of them it is an emotional choice because the purchase is expected to contribute to their future happiness, whether it be their future home or their future holiday home. I wish i could change it, but I can't. All we can do is try hard to form a relationship with the seller so that they feel bad about wasting our time and will listen to our advice about when they have been offered a fair price.
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Post by darcy on Oct 8, 2008 10:40:45 GMT 1
4. Intensify human settlement project on Mars and send Croatians there (as the Croatian jails are filling up quickly).
I think this will improve availability and affordability of the Croatian real estate.
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Post by choink on Oct 8, 2008 12:03:03 GMT 1
i totaly agree with you madgolfer as far as buyer and seller mentality probably is similar all over the world. but croatias coastla property overpriced. its all on sale for about double than its worth. many dont have sewers, dont have footpaths, street parking spaces, crappy neighbours, etc.... so how can any villa on the coast be worth millions? how? if the economy was all good, if there was no corruption at local and govt levels, if the streets were all nicely planned , with palm trees,m if houses were made with superior architectural designs, maybe then...they could ask a million or two. but for a box on a plot, with nothing going for it but a sea view...well Ripp off!
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