If you have ever asked experts when the best time to buy an apartment or other property is, you have probably received the quick and simple answer: now. In other words, the market is unpredictable, so if you find an apartment you like, which is not easy, you should buy it.
However, as prices per square meter have recently been soaring, anyone structuring financing is understandably asking whether to buy now or wait for prices to fall. We spoke with real estate advisor Ivan Varat about the current phase of the market and how to recognize the right moment to purchase property.
Price per Square Meter in Zagreb in 2021
Although buying just one square meter in Zagreb requires several average monthly salaries, properties continue to sell rapidly despite the pandemic. The average price is around EUR 1,800 per square meter, though this includes both more expensive new developments and more affordable older properties.
“The market is still in an expansion phase. Demand for quality properties in attractive Zagreb locations remains high, so I do not expect prices in that segment to decline yet.”
Ivan Varat from San Patrik Real Estate notes that the largest number of transactions in Zagreb typically occurs before APN subsidy tenders. Due to strong demand, prices continue to rise, and buyer interest grows at the same time.
However, economic analysts warn that several uncertain years lie ahead and suggest it may not be advisable to buy apartments in Zagreb or Rijeka at current high prices. Despite this, demand remains strong, which even industry professionals find difficult to fully explain.
Who Are Today’s Property Buyers?
It may seem that everyone is searching for their own home. In reality, the number of housing loans is rising, largely thanks to government subsidies for young buyers under 45 through the APN program. Around 4,000 applications are expected in the upcoming APN call, potentially creating thousands of new homeowners.
“At some point in life, everyone feels the need to change their property,” says Ivan Varat. “Life circumstances do not wait. Our buyers are of all age groups. Young families need an extra room after the birth of a child. Divorces lead to property division. Older individuals often look for smaller, easier to maintain homes. APN is specifically designed for buyers under 45, helping many secure their first property.”
Buying a first home is a major life step. It is even more satisfying if it can be done without borrowing. And such buyers exist. More than half of property purchases in Croatia are paid in cash.
Research shows that during the pandemic people saved more. In this region, surplus money is most often invested in property. When someone saves, inherits, or earns significant funds, purchasing real estate is considered a logical choice. Savings interest rates are minimal, and many are less inclined to invest in stocks or investment funds.
The Worst Time to Buy Property?
Because of the pandemic and earthquakes, market stagnation had been expected. Prices were predicted to stabilize or even decline. Contrary to expectations, prices continued to rise along with demand. We are currently in a seller’s market. Sellers dictate the pace and can choose among buyers.
“There are periods dominated by buyers and periods dominated by sellers,” explains Varat. “In a buyer’s market, there are more properties than buyers. In a seller’s market, there are more buyers than properties. Multiple buyers compete for a single property, and almost all quality properties are sold.”
This does not mean it is impossible to find a property within budget. Negotiation remains important. Depending on how urgently a seller wants to sell, the asking price can sometimes be reduced by 10% to 15%.
Buyers should also remain flexible if they want better pricing. With professional guidance, they may consider alternative locations offering better value. Often buyers overlook opportunities simply because they are focused too narrowly.
The Best Time to Buy Property
Life circumstances may force decisions, but when finances allow flexibility, timing the market can help. The real estate cycle typically moves through four recurring phases:
1. Expansion phase, where prices are at their highest. This is the current phase.
2. Increased supply phase, where demand declines and prices stabilize.
3. Recession phase, where demand is low and prices reach their lowest levels.
4. Recovery phase, where demand begins to rise again and prices follow.
No one has a crystal ball to predict exactly when prices will fall. Currently, demand remains strong, especially for new developments that often sell before construction even begins. However, the growing number of building permits suggests that supply will eventually meet demand, leading to stabilization.
How to Decide When to Buy
If you have firmly decided to purchase a new home, the first step is securing your financing. This includes verifying creditworthiness with a bank or arranging the sale of an existing property.
Keep in mind there are additional costs that require savings. A typical deposit is around 10% of the agreed price, which buyers usually finance from their own funds. The remaining balance may be covered by a mortgage loan.
It is also essential to clearly define priorities and criteria, as finding a perfect property is rare.
We are currently in an expansion phase characterized by strong demand, low interest rates, and record high prices. Buyers must adapt accordingly.
“The best time to buy property is highly individual. Even if prices in some Zagreb neighborhoods are rising rapidly, expanding your search to alternative locations may reveal excellent value relative to quality of life. The most important thing is to find a property where you feel comfortable and that fits your budget. Opportunities and room for negotiation always exist.”
Persistence is key. If you need support or are unsure about the right timing, reach out to the experts at San Patrik Real Estate, where you can expect a personalized approach and positive energy.
Author: Ivana Alfier, Stanarica.hr
