Has this global financial crisis brought us any good to the Croatian property market? What am I talking about now, you are probably wondering, cause how can any crisis be good, especialy when we are talking about real estate investment. Well, this might be true for highly developed markets, but Croatia is still an emerging market with a lot to learn.
For example, the mentality of the people has changed drasticly since the crisis hit the world. Most of the old houses on attractive locations on the Croatian coast are in family ownership. During the last couple of years the tourist and real estate “boom” hit Croatia. A country that was once almost completely isolated was now featured on covers of the most famous travel magazines in the world, which led to a dramatic increase in the number of visitors and real estate investments. People from all over the world were on their way to grab houses on the Adriatic coast! People in Croatia, or better said families who owned the houses, were not quite used to all these new “free market” laws. Some of them saw the chance to earn some money, but they didn’t know how the real estate market worked. These sellers would put a price on their property which not only included the real value determined by the market situation, location, quality, but also their ow subjective value. “My grandfather built this house and I am not about to sell it cheap!”, for example. There were also those who planned to solve their financial situation for the rest of their lives by selling just one house they owned or inherited! These would determine the price based on the amount of apartments they need to buy after selling in order to live of renting these apartments so they could quit their daily jobs… Tha saddest thing about all of this was that the market had no problem with this. The demand was huge and loans were in abundance!
Now, situation is a bit different. There is no more high demand, but there are sellers who kept their prices unrealisticly high for years and have now found themselves in dire need for some cash. If you are the party that happens to have what these people need, and I am talking about money, possibly in a strong foreign currency like €, than you can negotiate a great deal! If you see that the property you set your eyes upon is highly overvalued by the seller, you can be sure that it is for some of the reasons stated above, or at least something close to that. This is your opportunity to do a little bargaining, preferably accompanied by one of the Croatian real estate agents and with a large amount of cash to put as downpayment. If you are skillful, you could lower the price for up to 20%, even more in some cases!