Indications of economic recovery in Europe, the fall in property prices on the Adriatic and the strengthening of the pound has again awakened the interest of foreigners to buy property in Croatia. Many Croatian real estate agencies say that they have some realized and announced contracts for 2010, but they also pointed out that customers are still more interested in cheaper properties, such as small vacation houses, while luxury properties remain unsold.
The crisis almost destroyed the housing market last year, but it also significantly affected the attractive real estate market on the Adriatic. Now, the things are moving towards a little recovery and it all starts in the North Adriatic and Istria. The main reasons for this are the recovery of economies and the strengthening of consumption in Western Europe. Foreigners are again up on their feet and they have returned to the Adriatic, which was always an attractive location, but, as mentioned in the beginning, they want only property that can be obtained cheaply. Some experts claim that it was the the fact that sellers are willing to significantly lower the prices that caused the apparent “recovery” of the market, and that the real situation will show in the coming months.
Otherwise, as far as the preference of customers is focus, except the price it is important that the real estate be close to the sea, and buyers are mostly looking for small vacation houses and apartments, agricultural land and olive farms and vineyards. What gives us even more reason for optimism is the fact that there are many investors who frequently contact agents and are interested in new projects.
However, some old problems are still there, although it was expected that the crisis will encourage their resolution. Primarily we mean the catastrophic situation in the land registry, unresolved ownership relations and the low quality of real estate. In combination with overestimated prices, this is the problem that repulses foreign customers. Foreigners just know exactly what they need, and they know and how much it is really worth. On the other hand, Croatian sellers often make unrealistic prices determined on the basis of totally subjective factors, which has already been mentioned in a lot of words in some previous articles. This situation leads to the creation of a balloon on the market, as there are more and more real estate buyers who are looking for property, but they are certainly not buying because of the huge price. This is an unsustainable situation to which, unfortunately, there is no end in sight.