It goes without saying that COVID-19 has had an unprecedented and far-reaching effect on each country's economy and, of course, on finances of natural persons and legal entities. However, it’s important to remember that in times of fear and uncertainty, there is also an opportunity - and that applies to real estate investments.
The owners have been hesitant to sell during the pandemic and kept prices of their properties steady, but we predict that as time goes on, more people are expected to be pressed financially, so consequently, there is a strong chance we will see an increase in the supply of high value, quality properties, and this could also mean we will see the prices decrease.
As we predicted earlier on, suburban and vacation coastline areas have seen an increase in demand so the time to exploit the trend is now. We predict that with so much demand and activity in above mentioned areas, any price reductions that might happen are going to be in the cities. This means that whether you are buying property for housing purposes or as a rental investment, you’ll find that when everything goes back to normal, you’re going to see a source of great returns in those properties. The same is applicable regarding bigger invesments, construction and develepment and so on.
As another argument in favor of investing in Croatia right now;
The situation is not fabulous: the economy is in recession, public debt reached high numbers since the pandemic began, and according to preliminary estimates, state budget revenues in the first quarter were lower by 2.6% compared to the same period last year – BUT croatian Minister of Financing and the CNB (Croatian National bank) have revised their GDP projection upwards and expect growth of 5.9 percent in 2021. Thus, in 2022, the GDP growth rate is expected to accelerate to 6.6 percent in 2022 and 4.1 percent in 2023. Furthermore, it is to be expected that the decade ahead will be one of the most prosperous periods for Croatia in at least the last 40 years with some of the reason for these high expectations being EU funds (in the coming decade we will have 30 billion euros at our disposal from various EU sources.), low interest rates and entry into the euro area (2023 or 2024, which by definition will make us less risky, so the required returns from investors will be less), change in the structure of the economy in the direction of exports, abundant sources of domestic savings, construction boom (in this sector we can expect a long growth phase, with cca. billion euro i.e. about 2% of GDP that will go through the construction sector just for earthquake remediation from EU fonds or through private investments in residential real estate).
Added: 15.05.2021.
Category: CROATIA REAL ESTATE NEWS
