Residential Property Prices Return to 2004 Levels, 30% Drop

Property prices in Croatia have returned to 2004 levels, but despite the drop there is little activity in the market as the economic crisis in the country hits deep, reports daily Jutarnji list…

Real estate prices have been on a steady decline for a number of quarters in Croatia, and the first quarter of 2014 is no exception. Prices have fallen 12% already on year-to-year.

At the end of the 2013 cumulative decline in residential property prices in Croatia reached their highest levels, down around 30 percent, similar to those of 2008 when the global economic crisis hit. The cumulative drop in ‘sought-after prices’ was a touch less (around 20%). With consumer optimism low, prices look likely to drop even further this year, says the report.

The latest data from the Croatian National Bank (HNB) for May shows that less mortgages are being taken out with the banks. In May 2014 there were 974 million kuna (127 million euros) less in mortgages compared to May 2013, and 2.8 billion kuna (366 million euros) less than in May 2012. At the end of 2004, when the mortgage boom started in Croatia, citizens had a total of 21.7 billion kuna (just under 3 billion euros) in outstanding mortgages with banks in the country, rising to 28.1 billion kuna (around 4 billion euros) a year later, and to 47.4 billion kuna (6.3 billion euros) in 2007. At the end of 2010 there were 60.9 billion kuna (8 billion euros) worth of mortgages with banks, roughly the same amount as today.