Croatia number of Real-estate agencies decline with 40%
According to the daily newspaper Vecernji list, around 40 percent of real-estate agencies has closed in the last 18 month, do to decline in sales.
At the Real-Estate-Forum which was held last weekend near Sibenik, problem and challenges in relation to the declining market was discussed, several long-time forum members did not attend at the 14th Real-Estate-Forum, as they have been forced to close down their real-estate agency do to the market conditions.
Croatia has according to the official statistics around 750 companies who deals with real-estate, but according to the chairman of the real estate business association, Dubravko Ranilovic these numbers are not realistic.
Ranilovic, believes that today only about 300 companies are directly or indirectly involved in the business, a few years ago this number was above 500.
Note from the Author: A real decline in prices as it has been seen in UK, Spain and on the Scandinavian market has not yet occurred in Croatia, the sellers still keep asking prices on an unrealistic level, which makes is a tough job for the real-estate agencies. A great example of the mismatch in the market was the recently held Property Auction in Zagreb which totally flopped.
Will the price decline come? As long as there is no or very little land tax, I am afraid we will not see any large decline in the asking prices, a minor part of the sellers who has to sell, do to various reasons, will sell, also at lower prices, but I see no reason why the general market should move in direction of lower asking prices. As long as the sellers have no, or only very little cost in holding on to their property, they will wait.
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In addition to the global economic downturn causing severe problems for the Real Estate industry, the new laws introduced this year governing the correct and professional conduct of anyone in the business, have also had a major impact, forcing many companies to close up shop who could not (or would not) meet the critera .
The new laws, which require all real estate agents and agencies to be licensed, have been widely welcomed by most people in the business and will immediately help create a professional and protected environment for foreign investors buying property in Croatia.
We should perhaps also consider whether the recent developments regarding the signing of the Lisbon treaty and the accord with Slovenia over the border issue, will now accelerate Croatia’s EU membership.
If that is indeed the case, we may see more and more sellers holding onto their properties, in the hope of prices rising even further once Croatia joins the European Union.
I agreed with you, these issues for sure had an impact on the number of Real-estate agents, personally I think it was great with the law changes requiring the agents to be licensed, before there was simple to many gold diggers in the business.
When I look at e.g. the Danish market, which in the Copenhagen area had a similar price development as here, the price till now went down with around 20-25% since the peak, but still there is no sale.
Real estate Economist says that the housing burden has to go down on 40 – 45%, which means that prices has to decline another 15-20%.
Here in Croatia it is even worse, for a four person family with average incomes, it is impossible to buy a flat, so I guess here, we need to see huge price declines before something happens, of course EU membership might give a short peak on a high price level. But reality will soon return, especially when the start taxing land heavily, which they eventually will have to do, as the state has no where else to get money.