Housing market in Croatia, according to some estimates, is still not stable. Analysis are many and they come from all sides, and some experts are even pessimistic enough to announce that the year ahead will be worse and anticipate further price drop, though such estimates should be taken with some reservations.
Prices of flats fell in 2009, but it is difficult to determine exactly how much because some of the high quality and good location flats even got more expensive, while for others prices fell drastically. Real data will be known in the next few weeks. Apart from problems with prices, a big problem could be non-return of loans to banks, causing a situation in which a large number of properties could go to banks, which could in turn lead to insolvency because of the inability to sell them. Such a development could have a negative impact on the construction industry, which is already faced with certain problems, and a significant number of construction firms, especially smaller companies, have justified fears of bankruptcy.
Banks have already begun to prepare for 2010 and they launched a write-off of bad projects. Bad credit policy regarding the purchase of real estate will leave a mark on the Croatian banking market, but most experts believe that new investments from banks will get into new cost-effective projects.
Predictions for 2010 also bring significant changes in the policy of investing in property in Croatia. New housing properties will be less built and most money will be earned from investment in office buildings, renovation and reconstruction of old dwellings and construction of energy efficient property that banks will encourage with more favorable loans.
The exact number of unsold flats is not known but it is assumed to be a figure between 10,000 and 15,000 apartments, whose value is estimated at over 8 billion kuna. In this situation all suffer – the state is losing tax revenue, builders will soon be out of work, which will again cause a decline in state revenues. Some politicians have suggested that the state should actively participate on the market by creating a guarantee fund to enable the price of commercial housing to reach the level from the program of encouraged housing.