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Post by amatesic on Mar 1, 2013 10:56:44 GMT 1
The number of court liens on properties doubled in the Zadar county in February. Raiffisen Bank (the Austrian division) has more than 14% of its portfolio in Slovenia and Croatia in credit default. They are short selling on properties or taking them into their own portfolio and then offering them through agencies for sale. They have said they will not finance any more new loans in Slovenia or Croatia, only to people who put down 40% to buy properties on their books. They told me that the next 3 years will be hell for them and for people losing their properties. That they expect the % of properties going to foreclosure to rise significantly.
Therefore I expect property prices, other than those very near the sea to continue to drop. Look for agencies offering distressed sales. Remember, Croatia is a young democratic and capitalistic country, the real estate market is still immature, agents will soon hop on board in order to make money and talk owners down from their current prices. Change just takes time. Cultural change takes even longer.
Croatians are proud. They would rather see their properties go to court auction then reduce the price on the property on the open market. I have to remember that Croatians are a proud people and those that have not seen how short sales, foreclosures are common in America and some other countries, are just too embarrassed to let others know they are having problems.
I attended a court auction two days ago in Zadar. Only 1 bidder turned up, not even the lien holder (was not a bank but a lien by a tradesman for work on the building) turned up, for a 30m2 apartment in Sv. Filip i Jakov, going to the block with a starting price of 1/3 of the valuation. My agent friend, purchased it for just under 15,000 euros for his daughter.
I have now attended several court auctions as a newspaper reporter to view the process, its a very interesting and bizarre process.
Be careful in buying, make sure the property is listed as not occupied on the court papers, otherwise you will have problems getting people in the house out, it will probably end up being a forced eviction which attracts camera crews and there is now a facebook group .... can't remember the name that was mentioned on the TV .... that can be contacted and they come out to protest the eviction.
Its best for all concerned is for real estate agents like myself to fully investigate our seller's situation and help them see that they need to reduce the price in the hope of getting a sale and coming out a little on top, and not be foreclosed on. I had a seller in a village very near Zadar last year refuse 350euro/m2 on his first row to sea land parcel of 800m2, to have it go to court and be purchased at 231e/m2 by someone who is flipping it and now is asking 340em2. It will sell this summer at this price and a foreigner will buy it.
Most people cannot stomach to go to court and see the distressed faces of the people losing their only properties. I sat through some auctions, and for people who have nothing else than their homes it is a very painful situation.
If you are interested in a distressed sale purchase contact your local real estate agent and see if you can purchase something where there is some win win on both sides.
I love the Beatitudes. In this situation this verse comes to mind. Be mercyiful and you shall receive mercy.
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Post by justapixel on Mar 1, 2013 12:46:41 GMT 1
I see that you have inside knowledge of property market in Zadar, so I'd like to pick your brain about it.
Is there any perceptible activity in Zadar area, or is everyone waiting for something (prices going down, property tax finally decided on, EU accession, whatever...)?
Is there difference in behavior between common and prime locations, or the prices are going down all over the map?
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Post by amatesic on Mar 1, 2013 22:54:31 GMT 1
Property prices are continuing to go down all over the board in the Zadar region and will go down more over the next couple of years, especially houses.
What is not going down is first row properties and those with panoramic views of the old city or the sea and islands in Zadar where the all facilities are close by.
For example, in Diklo in the last 12 months .... 8 first row properties were sold. Two houses, side by side were sold for 1.7million euros for demolition so that a new large house and servants quarters of over 800m2 could be built on a parcel of 2200m2. Another two first row houses were purchased for 1.2 million for demolition. I am not sure what is going to be built on the land but the Czech that purchased the two properties has a large house at the back of the two properties and has just cleared the land for now. The total parcel size of the 2 purchased properties is around 1200m2. A third property, which is a small attached exclusive villa consisting of 4 bedrooms, 3 with bathrooms upstairs, a kitchen and dining and lounge with a fireplace and large balconies and terraces and garage on a land plot of 320m2 sold for 750,000 euros. A fourth first row property, a small older bungalow house on an L-shaped plot of land of around 900m2 sold for 400,000 euros, with a narrow access to the land. I have a client now who has me buying up a total of 3000m2 in 3rd and 4th rows to the sea at prices between 220e/m2 to 290e/m2 depending on whether the titles are clean or not. I have another returnee wanting 2000 - 3000m2 land plot with panoramic views and can be up on the hill above Diklo and willing to pay 250e/m2.
Yet I cannot get buyers for average houses or apartments in Diklo as they are still considered as too expensive or too far from the old town. So the rich are buying in what are considered good locations, but the middle class are not buying.
At the same time a land plot 800m2 first row to the sea in Kožino with good road access at 400 euros per m2 has not sold in the last year yet even two years ago this would have sold as soon as it hit the market.
I can't sell a prime apartment which does need renovation but in a solid building in the old town on Zadar's riva of 100m2 that could be split into 2 50m2 apartments for 210,000 euros and it has excellent open views to the sea and islands. A few years ago this would have sold for 330,000 easily. Even the fact that one could rent two 50m2 apartments at around 400-500 euros per month each if nicely renovated is not moving it. Also one would not even need to rent it all year, one could rent it out just for the 3 summer months at 30 euro per person per night easily.
Yet smaller 40m2 apartments that need renovating under 60.000 are in huge demand and there are none on the market in the old town. A number of Zadar investors are buying up all properties that come on the market in the are of Kampo Kaštelo in Zadar ... all for holiday lets.
Generally first row properties are not coming down in price throughout the entire region either are small apartments with views very near the sea, excepting for the areas of the Novigradsko Sea, Ražanac, Vinjerac, and north side of the island of Vir.
In my opinion there are houses that are first row to sea whose prices should come down, especially those that are older than 20 years and need updating, regardless of the area they are in, as they have been on the market for years now and have not sold.
Island properties are down too across the board, but still have a way to go.
That is pretty much the real estate picture in Zadar today. And the number of sales per month have dropped significantly over the last 3 years.
I have been in this business now for over 7 years and have clients that refer me to their friends and family so I am content, but I closed down my center of town office 3 years ago when I saw we were headed for difficult times. I went bankrupt once in the US and knew when it was time to pull out, reduce operations and cut costs.
I wrote a report for a British Investment Group 4 years ago and predicted that prices would fall in Croatia when all other real estate advisers were still predicting continued growth in the Eastern European market. I can locate the report online if you are interested, it covered the entire Eastern European market.
I believe we will not see a turnaround in the general Adriatic market for another 3 years. The market will drop further over the next 2 years, stablize for a year or two and then the market will start going up again.
If I had money and was young, I would look to purchase good larger agricultural land parcels around Zadar, in areas with views over agricultural valleys with a home attached to the agricultural land or nearby. These are not too expensive now and the value will definitely increase over the coming years.
I would also purchase properties on the road right under the Velebit mountain range from Starigrad to Senj, naturally with views or nicely secluded areas, but not above the road, again as close to the sea as possible. The old stone houses right on the water in some of the coves, or land or ruins in secluded coves. This road will over time be on the map as a main tourist road known for its panoramic views and stark contrasts of mountains/rock, sea, sky and islands. Also as sports and nature tourism increases in Croatia, this area will rise in value.
Hope this gives you a good insiders view.
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Post by justapixel on Mar 2, 2013 1:21:47 GMT 1
Property prices are continuing to go down all over the board in the Zadar region and will go down more over the next couple of years, especially houses. What is not going down is first row properties and those with panoramic views of the old city or the sea and islands in Zadar where the all facilities are close by. I guess then that I estimated the situation correctly.  I wrote a report for a British Investment Group 4 years ago and predicted that prices would fall in Croatia when all other real estate advisers were still predicting continued growth in the Eastern European market. I can locate the report online if you are interested, it covered the entire Eastern European market. That was in 2008 or 2009? The crisis had already started and it was pretty obvious that the prices would go down. Then again, many people, especially real estate professionals disagreed, many of them very loudly... If I had money and was young, I would look to purchase good larger agricultural land parcels around Zadar, in areas with views over agricultural valleys with a home attached to the agricultural land or nearby. These are not too expensive now and the value will definitely increase over the coming years. Yeah, that looks like a solid investment, but the ones buying such land should think pretty long term. If I had some money, or if I were young...  I would also purchase properties on the road right under the Velebit mountain range from Starigrad to Senj, naturally with views or nicely secluded areas, but not above the road, again as close to the sea as possible. The old stone houses right on the water in some of the coves, or land or ruins in secluded coves. This road will over time be on the map as a main tourist road known for its panoramic views and stark contrasts of mountains/rock, sea, sky and islands. Also as sports and nature tourism increases in Croatia, this area will rise in value. Almost every spot there has a beautiful view and the sea is extremely clear, but you should bear in mind that those parts have far too much bura, even in summer, and the sea is frequently very cold because of many underwater springs. Hope this gives you a good insiders view. Thanks a lot, your reply was unexpectedly extensive. . |
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Post by amatesic on May 31, 2013 15:37:56 GMT 1
At an auction that I attended a month ago ... a land plot 2 row to the sea in Diklo seaside village of Zadar, but part of Zadar of 800m2 sold at 180e/m2. Same time ago a front line villa on Zadar's millionnaire row go to 380K and the bank would not let it go at that and bid higher ... same bank tells me that the beginning price on this village will be 400,000 or 450,000 euro once all the paperwork is completed ... they will receive offers and negotiate with potential interested parties within a given timeframe and the property will go the highest offerer. Jadranka www.adriamare.hr |
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Post by amatesic on May 31, 2013 15:39:03 GMT 1
Don't underestimate what you can get at an auction ... just be sure its clear of owners themselves...otherwise could be a pain .... so stick to land and builder's apartment units.
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Post by mislav on Jun 4, 2013 12:09:04 GMT 1
Thanks. So, you are confident prices will slide at least 20%? That is suggested to me.
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Post by hravathouse on Jul 2, 2013 14:31:28 GMT 1
"Be careful in buying, make sure the property is listed as not occupied on the court papers, otherwise you will have problems getting people in the house out, it will probably end up being a forced eviction which attracts camera crews and there is now a facebook group .... can't remember the name that was mentioned on the TV .... that can be contacted and they come out to protest the eviction."
I may have an opportunity to bid on a house being sold by the court, perhaps at a price substantially below market value. The Croatian attorney with whom I discussed this said that the court is obligated to deliver an empty house. Are you saying this may not happen, or that there may be additional complications? Are any associated protests more than a nuisance? Would they materially affect the ability to resell or rent the house (the house is in a commercial area where renting for a business use might be possible)?
Thanks in advance,
Bill
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Post by mislav on Jul 3, 2013 15:39:35 GMT 1
The court is selling any property marely as part of the enforcement order on behalf of creditor. So, this is not property of the court. The court will follow "buyer beware" and "as is" principles to govern the sales process and deny any liability. After all, the court is only a facilitator of the final court verdict. Property might change the title, but there are other factors governing the dwelling.
So, it si all up to you - do you think that hard working Croats should suffer for greedy foreigner to pocket a hefty and easy profit? Eventually, police will envict them or you could make a deal, it might cost you the same. It is more a matter of individual conscience and moral character.
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Post by crojoe on Jul 3, 2013 18:23:58 GMT 1
The court is selling any property marely as part of the enforcement order on behalf of creditor. So, this is not property of the court. The court will follow "buyer beware" and "as is" principles to govern the sales process and deny any liability. After all, the court is only a facilitator of the final court verdict. Property might change the title, but there are other factors governing the dwelling. So, it si all up to you - do you think that hard working Croats should suffer for greedy foreigner to pocket a hefty and easy profit? Eventually, police will envict them or you could make a deal, it might cost you the same. It is more a matter of individual conscience and moral character. Here we go again, another statement that it's the "greedy foreigners" fault? The question is, who took out the loan, who couldn't pay it back, who is selling the property? Probability is... Croats. Who is selling their properties or land on the coast for huge amounts of money on the coast...Croats! Who is looking for foreign investment... Croats! Who is allowing corruption to flourish in Croatia... Croats! You might be interested to know that most "foreigners" are afraid to invest in Croatia for all of the above reasons. Many have been burned over the last 10+ years, so stay away. I had a friend in Croatia who had a little clothing shop, and because he was a foreigner the inspectors hounded him each month, finding fault each visit and shutting him down for weeks or till he paid some "fine" (without an R1 issued from the inspectors). Finally he gave up and closed the shop. Back in the UK he is doing fine. Another guy also did some importation and was hounded endlessly, so finally gave it up and started teaching English. These where not your Mr Konzums, your Agrokors or big players, just small folks trying to make a simple living and running their own businesses, hiring Croats. Now those Croats have no full-time jobs. The big difference is most countries in the EU (Aussie, USA, Canada)accept immigrants, foreigners who are willing to work, especially those who open their own companies. Can the same be said about Croatia? |
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Post by amatesic on Jul 4, 2013 15:06:27 GMT 1
Agree with CroJoe .... to the extend that Croats are their own worst enemy ...
Anyway ... I said that its not a good idea to purchase an occupied building .... however land is another matter ... it is unoccupied and some good deals are to be had. In Zadar for instance on the 9 July there is a land auction of 4280m2 land for sale in Plovanija, in the building zone ... purchased at 170e/m2 now at a starting price of 75e/m2 ... also the owner of the land has just landed in jail ... for extradiction to a EU country ... so those that want to build several 6 unit buildings and and you figure you can make a profit when selling your apartments for 1600e/m2 ... which you can ... and from my calculations your profit margin should be around 15%-20% .... HERE IS YOUR OPPORTUNITY. Get in touch with me if you are interested. Many builders in Zadar are continuing to build and sell profitably ... but the selling price must be at 1600e/m2 not more.
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Post by amatesic on Jul 4, 2013 15:09:41 GMT 1
Also I have an exclusive on a seafront property estimated at 1million to be auctioned (2nd auction at 1/3 starting price) in September ... and we are looking for buyers prior to the auction to settle the lein and owners are naturally ready to leave property in tiptop condition if settled out of court, otherwise it will take time and money to evict them. We have a firm offer for the property at 600,000 euros ... it is an executive home with swimming pool ... 4 bedrooms with ensuites, etc, manicured gardens etc... first row to the sea.
So if, interested, drop me a line.
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