Property Investment Croatia | Foreign investments key to recovery

Posted on July 29, 2012

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What will be necessary to make the Croatian real estate market finally free of this crisis? It appears that all the efforts of local banks and the state have so far not led to a significant shift for the better and to make matters worse there has been no significant fall in prices. In such circumstances it is difficult to sell a property, as evidenced by the increasing number of cancellation of agencies and many agency employees losing their job.

It seems that the only effective solution is increased investment on the market. The Croatian market can not independently initiate a significant investment cycle because there are not enough investors and it is also a small market compared to others. What we are waiting for in this situation is the stronger growth of the largest European markets, which should lead to a new investment cycle in Croatia.

Continuation of negotiations for accession to EU will send a message to investors about stabilization and potential benefits of investment in Croatia. The fact that Croatia is closer to entry into the Union combined with a defined strategy and investment incentives could create a new interest among investors and encourage foreign investment.

What is now hindering new investments across Europe are low rates of return, so investments of most countries are lower as much as 60% compared to the first half of last year. However, as 2009 is getting closer to the end increased investments are expected in most countries, and it is also expected that the next few years will bring more stability regarding the rate of return. Currently the banks are also not helping a lot with their limited offer of loans, and if they even give credits then they do it by much more stringent conditions. All this has a bad effect on the real estate market and it is a part of the reason for current slow pace of recovery.

Fortunately, good news are coming from the United States of America, Canada and Asia, so next year we expect more investors from these countries, especially from China, whose investors could start up the sleepy commercial real estate market.

via Property Investment Croatia | TRASA Real Estate Croatia – Part 5.

Posted in: Croatia