Suppose that a Croat with an average salary wants to buy an ordinary one bedroom apartment with a living room for some € 80,000. How to get credit for such purchases? Fairly easy if you are willing to offer a mortgage and are able to find two guarantors with above-average salaries in these economic conditions. Sounds simple enough? You may have another property to offer a mortgage? Then you don’t have to find a guarantor! Of course, it is desirable that the guarantor’s pay is completely unburdened. There are a lot of people like these in Croatia, right?
Croatian newspapers Vecernji List made a survey among banks and customers. Payment of loans is getting worse, so credit conditions toughened. Some banks have a maximum amount of installment in relation to the salary, some have conditions that you need a guarantor or not, some are looking for life insurance, some determine the maximum loan amounts in relation to the value of the property … Each bank has different policies.
Potential buyers are quite disappointed with such a situation and often give up on buying their apartment. All are hoping that government incentives in the housing market in Croatia will bring some changes that could facilitate availability of loans, but the whole situation is not encouraging.
Croatian property market is in great crisis, and neither the banks nor the Government are not ready to make any concrete measures to change it. Of course, the government announced incentives, but their impact is uncertain and it is questionable whether there will be any significant change. Most economic analysts agree with this. The banks also do not help very much. Extremely stringent credit conditions do not lead to anything in the long term. Without money there is no investment, no new buildings, no jobs and without all that there no new cycle of growth.
This situation is not good for anyone in the market. Croatian real estate agencies and construction contractors are facing the future with great interest and uncertainty.