Small “Improvement” on Real Estate Market Expected in 2015, Prices Still Falling

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While a total of 1,800 real estate deals were recorded in the third quarter or 18% more year-on-year, the growth in the number of deals was especially strong in the second quarter, when the increase was 22% compared to the first quarter and 27% year-on-year.

"The buyers are 'tired' of waiting and the sellers have become more realistic price-wise," real estate agent Alen Komić has commented for the STA, claiming that banks seem to have also become more open to lending.

Dejan Papež of the real estate market department of the Chamber of Commerce and Industry (GZS), on the other hand, points out that fewer new flats were sold in 2014, while the used flats market became somewhat more lively.

Prices continued to fall, by 6.6% year-on-year in the first quarter, 9.8% in the second and 5.4% in the third. Compared to the average of 2010, prices were between 13-17% lower in individual quarters.

According to the National Mapping and Surveying Authority (GURS), the average price of a square metre in the first half of 2014 was EUR 1,500, while an average house with a plot cost EUR 106,000.

Used flats accounted for around two thirds of the sold flats and prices were down by almost 10% year-on-year in the first and second quarters and by 8% in the third. The average price in the first half of the year was EUR 1,490 per square metre.

New flats were also cheaper, by 6%, 15% and 1% in the first three quarters, respectively, while the overall price drop was mitigated by the houses segment, which saw declines of 3%, 7% and 4%, respectively.

GURS does not expect any major changes this year, at least not in the first half, even though the Bank Asset Management Company (BAMC), the state-owned bad bank, entered the market in November last year and is also expected to start selling flats this year.

BAMC, which is now mostly selling building plots, has taken over claims that also involve more than 2,000 flats as insurance collateral, but the bad bank cannot yet say how many of these flats it will become the owner of and how many will be sold in receivership proceedings.

Analysts however feel that BAMC's presence on the market will not have any major effects, since the bad bank has announced that its property will be put on the market only gradually and at market prices.