Croatia´s real-estate market continues to decline

Croatian Times

While western real-estate markets are showing signs of recovery from one of the worst crises in history, real-estate prices in Croatia are expected to continue to fall this year, possibly up to five per cent.

According to research by London-based Knight Frank Residential Research, property prices have experienced significant growth in the first quarter worldwide. In many countries, they have returned to pre-crisis levels, research shows.

In Great Britain, for example, real-estate prices in the first quarter jumped by 8.9 per cent while in the USA they grew by 2.3 per cent. Growth over 10 per cent was registered in the Scandinavian countries, Canada, Australia, South Africa, Israel, Singapore and Hong Kong. China saw incredible 68 per cent growth.

Even countries such as France and Germany that have experienced smaller increases contribute to what can be seen as clear signs that those markets – and the economies of those countries – are recovering from recession.

The only EU countries where real-estate prices have dropped are Ireland and Spain, a development explained by greater supply than demand.

Although Croatia was not covered by the research, data show that apartment prices continue to fall as in other transitional countries like Latvia, Lithuania and Bulgaria.

Economist Damir Novotny has said: "There was not such a dramatic drop in prices in Croatia as in the rest of the world, but our markets slower to recover." He has predicted that prices will continue to fall, or, in the best-case scenario, stagnate until Croatia enters the European Union.