In a time of crisis housing savings societies are perhaps the best form of savings. The reasons for this are their conservatism, security of operations, stable yields and state incentives.
Every Croatian citizen can be a client even if he is residing abroad and contracts are concluded for a period of 5 years. If he makes a loan before the end of the contract, the entire contract amount will be placed at the client’s disposal. There are a number of tariffs depending on savings time, and interests on deposit of 2-3%, depending on the currency clause.
Signing a new contract after the first 5 years gives the right to progressive interest, that is to an even greater profit. After 5 years the client can also use all special purpose funds and government incentives. Some savings banks offer different interest bonuses, especially if the client contracted savings for a child. These bonuses range from 25 to 100%, which is a great encouragement to all young parents.
Most deposits in housing savings are ensured, and every individual family member has the right to a contract. With interest and government incentives to the annual amount of at least 5,000 kuna, it is clear that this is the most profitable form of investment with great safety. After several years of investing in risky stocks and various investment funds, which was a big hit among many citizens of Croatia, it seems that the financial crisis and recession destroyed all illusions and that people are again returning to conservative forms of investment of their funds. In addition to savings banks and the financial market, this is good news for all entities involved in the real estate market in Croatia, whether it is the construction companies or Croatian real estate agencies, since the large amount of housing savings could easily end up on the market.

Five Croatian saving societies concluded over 100,000 new savings contracts worth about six billion kuna in the first 9 months of 2009, which is a growth of almost 10% over the same period last year.

Most new contracts were concluded by Prva stambena stedionica. Also, very good results have enabled savings banks in Croatia to achieve great growth in revenues and profits. Thus, their total gross profit is more than 40 million, an increase of over 250% compared to 17 million from the previous year. The biggest gain was made by Prva stambena stedionica. The only minus was recorded in operations of the Raiffeisen housing savings. Total assets of Croatian saving societies at the end of September amounted to over 6 billion kunas, or about 5% less than in 2008. HPB residential and Wüstenrot are the only ones that recorded growth, while others recorded a decline in value of assets. Banks and savings banks also have a high capital adequacy ratio of 15%.

We have good news in the banking market too! From 1st of December 2009 Zagreb Bank returned the offer of housing loans for young people, designed for customers under 40 years of age for a period of up to 25 years. In relation to the standard offer, the interest rate is lower by 0.5% and it is 7% linked to foreign currency in € with a reduced ratio of loan amount and collateral. So loans can be approved with a minimum participation of 10% without guarantors and without deposits. Insurance instruments such as life insurance, cash or funds deposit may also be paid from the loan. The fee for approving the loan is 1% for purchases and 2% for reconstruction of a property. All beneficiaries of ZABA housing loans in Croatia can get large discounts for equipment and renovation of the property. CEO of Zagreb Bank said that such changes are possible because of the cheaper sources of financing in the international market and we can expect a further decline in interest rates in Croatia. Larger and more favorable credit offers can help sales of new apartments, so more and more investors are realizing that they must adjust their prices to the emerging market conditions.

Everything must end where it is started and the crisis will also probably end in America, most probably on the real estate market, which is where the breakdown began and triggered the avalanche of problems that we encountered during the last year or two. This is why every good data from the United States makes us all especially happy.
For starters, the number of houses that went to construction in August grew by 1.5 percent to almost 600 thousand, 598 thousand more accurately, which is the largest increase in the nine months of 2009. Also, work has begun on 25 percent more family housing units and soon government incentives to build first houses will start too. This all had a positive impact on the labor market, which is slowly showing signs of recovery as the number of applicants at the Department of Employment fell by 12 thousand.
Besides all mentioned above, the fact that the U.S. central bank, the Federal Reserve, has plans to insert further 1.25 billion U.S. dollars to the mortgage market echoed all over the place. The goal is to revive the stumbled U.S. economy through the recovery of the financial system and reduce the various requests for FED’s assistance from banks. Several support programs were also approved aimed at combating the credit crisis that started two years ago, in August 2007. Since the start of 2009, FED invested almost $ 700 billion in mortgage insurance, and by April 2010 there are plans to spend another 556 billion in order to maintain low interest rates.
It seems that the crisis in the banking system of the United States finally ended and now is the time for programs that will strengthen the economy again. Besides the obvious reasons why this is good news for the citizens of the United States, it is also very good news for the rest of the world because it signals the recovery of financial and real estate markets in other countries that were hardest hit by recession, especially in Europe. Such developments should also positively affect the recovery of the economy in Croatia, while the increase in purchasing power could return foreign customers to the Croatian property market.