Speaking at the 8th Annual International Conference on the Real Estate Market in Croatia, Minister of Construction and Zoning Ivan Vrdoljak has stated that without private investment fat loss out of the current economic crisis.
"Government purchase of infrastructure and the real estate sector inside the coming period will be considerable, but it's well known that state investment alone are unable to bear the brunt of economic recovery" said Vrdoljak, adding the Ministry will be 'at their service' for private investors desperate to invest in Croatia.
Vrdoljak also announced that new laws changes were being prepared, meant to make the realisation of investment projects easier, namely regarding zoning and construction. The Minister states that they should be in place by the end of year.
Also at the two day international conference , British ambassador to Croatia David Slinn reported on construction projects currently taking place in London for this summer's Olympic and Paraolympic games.
Continuing on from your latter half of 2011, first line real estate in Croatia, in particular in Dalmatia has become selling fast. For prime located real estate property such as land, apartments, villas and old stone houses which might be next to the sea it is now a sellers market, with the number of buyers far outweighing the number of properties available on the market to buy. As a result we are seeing all the usual hallmarks, price increases, gazumping, agent tricks and general difficulties a final thought as buyers compete to obtain deals done.
Our experience since summer 2011 is because they have risen by approximately 15%. Land prices in Croatia have risen from approximately ?300 to ?400 per m2 and perhaps to ?500 / m2 for the those plots which can be smaller (less than 500m2) and of the proper shape and position. Of course this only relates to those plots where access is apparent, utilities are on or not far from the site and the land is within the existing residential building zone, meaning you are able to obtain a building permit immediately. Detached houses that want renovation on land plots from 300m2 to 600m2 were selling for approximately ?300,000 but are now selling from ?350,000 to ?400,000 an amount increase of around 17%. It is now extremely hard to find a small detached house looking for renovation and by the sea at under ?300,000.
We think this trend will probably continue for 2012, although with the brand new law of legalization now available we are seeing more properties coming onto the market in better positions. Whilst they still need to be legalized, due to the drastic shortage of prime located real estate in Croatia and in particular Dalmatia, buyers are increasingly accepting of the idea of purchasing a house that will need legalization. This is for two reasons, firstly sellers know that they cannot expect to receive any money to the property until the legalization process may be finished and secondly there exists in fact very little risk on the buyer other than time and some initial upfront costs, notably the lawyer.
Sales involving Croatian properties that require legalization are structured in a way whereby a contract is signed, a deposit is given, usually 10% and which is placed on an escrow (usually the public notary or buyers lawyer's account) with all the balance being paid as soon as the legalization process has taken place. How long required for the process to be completed varies with respect to the local planning office, because some areas have considerably more illegally built real estate than others. Rogoznica, north of Split is a great one. This area has a vast number of illegal houses and the planning office is swamped with applications for legalization. In Rogoznica for example it can take 12 months to finish the procedure. One thing that is of importance and dramatically increases the planning process is ensuring that the architect leading it submits all the correct and necessary planning documentation. Missing or incorrect documentation can slow the task down considerably.
The number of Croatia real-estate buyers currently in the market is also up on last year. Real estate agencies inside the Central Dalmatian region for example are receiving a lot more activity. The biggest problem agencies face now is the lack of buyable product in the market place. High of what was left from developments built through the boom period has sold through and what's left can often be poorly positioned or in lesser locations. Almost all of the current sales are resale properties from foreign buyers who purchased property in Croatia over the last 7 to 10 years or local owners who have decided to sell for a variety of reasons. Unfortunately it would seem this trend is set to carry on as developers are holding back because of poor credit conditions and an uncertain financial outlook.
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For more info about real estate market inside Croatia you should check at Croatia real estate .
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