In recent years, real estate prices have increased dramatically. “While in most EU member states prices drop by 5-10%, in Croatia the average growth is around 10% per year. There are several reasons, the most important of which is inflation, which is still at 5% – explained Saša Perko, director of the DOMinvest group to Dnevnik.hr -. The construction sector significantly affects this phenomenon due to the continuous increase in material costs. On the other hand, due to the high demand for construction workers, the prices of services increase rapidly. For some the price has doubled compared to 4 years ago. Growth is favored by the many contracts carried out thanks to the allocation of European funds, due to which the prices of construction services increase significantly.” In addition to the cost of the works, he says, the costs of land have also increased dramatically, the price of which has doubled compared to 2020.
The market is more or less real as it defines the price. If no one bought at these prices, they would decrease, as is currently happening in Germany. According to Perko, the biggest problem is the supply of quality properties. In Zagreb, high-quality plots of land can be counted on the fingers of one hand and the owners demand huge sums for them, he says.
«The first burden is VAT, which goes directly to the State. So, if the net price per square meter of an apartment is 3,000 euros, the State collects almost 600 euros. The most significant expense is construction, which affects 40 to 45% of the costs of the entire investment. At the construction stage it should be mentioned that the contractor builds the building according to the BRP (which includes the surfaces of walls, stairs, corridors and boiler rooms), while selling only net square meters. Construction there no longer costs 1,200-1,400 euros per square meter, but the revenue is 20% less, so the construction cost in that case is 1,500-1,750 euros. Then there are the land, professional design and supervision, connection costs, utility and water contributions, marketing and sales costs and other indirect costs that can reach 1-2% of the investment ,” explains Saša Perko.
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