New oonstruction or old? New apartments are nice, but often they know to offer poor quality. In any case, it is best to bring a guide who understands the issues during the purchase.

The difference between the quality of the construction of new buildings and old buildings is great. Each new apartment is equipped with separate devices for measuring energy consumption and the difference is even greater when it comes to materials used during construction. If you consider all possible new technologies that are now used in construction, then the new building should be a sure winner. However, everything changes when we know that the apartments are still built by people, people who usually like to invest in something and save some money during the process. This leads to big problems, because not many use quality materials, nor the most modern technologies. In addition, old buildings are usually built to suit needs of people, which means that durin construction builders thought about comfort for the people who will live in an apartment, not just the profit, which is the case today. Besides all stated above, the greatest advantage for old buildings is definitely location. All attractive locations for construction of real estate were occupied a few decades ago, so if the buyer just has to live in the city center or some other attractive location, he/she is ready to give an unrealistic amount of money for an apartment in an older building. This is an emotional component that is difficult to express in money.

New buildings have their advantages and the old have their’s, but the biggest problem is that the difference in prices between the old and new housing is simply too small, which creates an unrealistic picture of the real estate market.

Real estate prices are down 7 percent and after negotiations they can drop up to 20 percent. However, it is expected that even lower prices are possible only for low-quality real estate. Furthermore, crisis and recession have extinguished more than 40 percent of Croatian real estate agencies.

The 60 percent drop of sales was too much for a large number of agencies and the situation is so bad that some are even considering not organizing some traditional gatherings at which many agents regularly came before. However, information coming from the market related to a decrease of 60 percent say it is not a realistic figure and that after the final analysis at the end of the year this figure will be around a more tolerable figure of 25 percent. Apart from the crisis, the problem is in the fact that opening the market for foreigners did not lead to more positive developments as was expected, but this is likely due to the crisis too.

We could find some joy in the fact that big European countries have started to slowly emerge from recession. The owners of agencies that had a smart business plan endured the crisis and hope that the situation in 2010 will significantly improve in realtion to 2009. Tourist season already helped the agencies on the Adriatic to achieve a certain income and announcements say it should be even better in the coming months.

As for the prices, they have fallen in all parts of Croatia, but further large drop is unrealistic to expect, especially when it comes to quality real estate in desirable locations. Agency owners hope that banks will not just stand on the side when it comes to the real estate market in Croatia, but that they will release the brakes in credit market policies to provide the market with enough money for recovery and development.

Despite the fact that the decline in prices is slowing down and the recovery that began slowly in some countries as the end of the year is nearing, the global real estate market continues to feel the effects of recession and the financial crisis.
Unlike the situation at the end of 2008 and early 2009 when prices around the world fell to historically low levels, the recovery of markets and prices in the second half of 2009 started in several countries. However, it should be noted that the world property market is still dealing with a lot of big problems. Data from many countries proves this.
The first signs of recovery can be seen in China, Portugal, Australia, New Zealand, France, Sweden, Hong Kong, Israel, Switzerland, Indonesia and Norway.
In Portugal the prices increased slightly more than 1 percent. Government subsidies, which are announced in Croatia, are the reason for growth in France, which is slightly higher than 3 percent. A similar percentage can be seen in Sweden. Swiss market opposes crisis since the end of 2008 and prices have risen nearly 5 percent in the first half of this year. Similar situation can be seen in Norway, which also shows a constant increase in prices in 2009. In other European countries a further fall in prices was recorded, ranging from small 1.75 percent in Germany to almost 10 percent in Bulgaria. The biggest drop of more than 26 percent was recorded in Riga, the capital of Latvia. Real estate market in this country is one of the hardest hit by the crisis, with a drop of more than 60 percent this year.
In the U.S. market there was a slower decline, which is quite good if we take into consideration that the United States is where the crisis started. In the second quarter decline was about 14 percent, which is about 4 percent less than the decrease of 18 percent from the first quarter. As for the rest of the world, quite a large drop of almost 50 percent was recorded in Dubai, but we also saw a slower decline in the second quarter there too.
Unlike the rest of Europe and the world, the crisis and the price drop in Croatia were not so drastic, but it is a small and rather open economy, so it is important to follow the events on the international markets.

Croatian courts have a difficult task of selling a large number of houses, flats and small apartment buildings whose owners have failed to meet their obligations to banks.
Owners of mosto properties are mostly citizens, while there is much less companies with similar problems. The value of property that will be offered for auction by the end of 2009. is about 250 million kunas (more than 30 million euros), but it is very likely that the sales will be achieved with a much lower prices, even up to 50% cheaper.
According to statistics over 93% of these procedures that were conducted during the last 5 years were conducted over ordinary citizens and sometimes craftsmen. Most requests for starting the proceedings came from the banks and other financial houses, but a good part often comes from other people or state institutions.
In addition to residential real estate, a number of meadows and fields is also found for auction. Many farmers have in recent years raised large loans for improvement of production, and now are in trouble because they are incapable of returning their debt and must sell the agricultural land.