Rate of housing loans from banks in Croatia is higher than the one payed for renting. This is a problem for most Croats …
Because of the difficult financial situation, Croatian citizens often opt for subtenantship, that is they life in other people’s homes for a fee. In developed Western countries this is not so strange, as the majority of people spend a lifetime as tenants, but here the ownership of a property has always been placed high on the priority list, especially since the subtenantship binds a number of problems.
One problem is the disproportion in the price and size of the apartment, so going to a small flat has the same cost as an apartment twice as big. Quality and equipment of the flats are also not consistent with the high prices. In student centers such as Zagreb and Rijeka these problems are more prominent. A large number of tenants are living in unregistered homes and most of them tolerate it cause otherwise prices would rise. In such cases they do not enter into a legal contract, so it often happens that the owner does not fulfill his obligations to tenants or does not give them back their refundable deposit.
Since there are almost no legal applications from landlord, official figures say that there are almost no subtenants in Croatia and the last data says it is a little more than 40,000 households. However, it is estimated that the actual figure is three times higher.
Now we go back to the beginning… The Croats want their own apartment and subtenantship is considered only as a temporary situation, so they are rarely paying attention the problems.

New provisions in the law permit a saving society to be actively involved in the construction by lending to the market the amount limited with the height of liable capital. This amount is currently 500 million for five largest savings societies. This figure is indeed impressive and its release could significantly improve the situation on the property market in Croatia. However, is it a worthwhile job? Would new housing in the current conditions ever find buyers?

Leading personnel from the biggest savings societies, which are mostly already part of large banking groups, believe that there is no sense that they perform work for which their parent companies are already responsible for, that is the banks. This is somewhat understandable because the banks already have a lot of big problems with construction companies, so there is no sense that the same problem gets pushed to the savings societies. On the other hand, there are societies that are not a part of banking groups, but act independently on the market. What will they decide?

Perhaps they are most likely to turn to their existing customers and move them in into “complete” buildings. This would mean that they would first start testing to determine whether it is possible to arrange their own customers to buy entire residential buildings, and if not then other savings companies and their customers would be included. This model could prove successful, especially in larger cities where there are a lot of clients.

The main goal of the whole project would be to effectively close the investment. Thus, the savings banks would credit savers, who would pay to construction entrepreneurs, and these would immediately return loans. Quickly and efficiently! Of course, most projects that could be financed would be smaller residential buildings, while some megalomaniacal projects would be out of the question.

Despite the fact that all together it sounds interesting, we need to wait to see what will happen with the long anticipated government incentives for the purchase of already built flats. It simply does not make sense to move in on any new revolutionary projects while the fate of thousands of unsold buildings is not resolved.