Property prices in the Croatian city of Split have been rising for some time and it is almost impossible to find an apartment in the city for under 3,000 euros per square metre.
For example, a square metre in the most expensive district of Split, Meje, costs almost 6,900 euros. Split real estate agency owner Ivica Vulić told N1 whether such prices can be maintained.
“Real estate prices rise according to the law of supply and demand”, explains Ivica Vulić, before adding.
“Split is specific, there is not much room for expansion, demand is high and that is why prices are rising. All new developments, after obtaining the construction permit are already sold, they are even sold without a defined price because the owners do not know what will happen in a year or two while the building is built.
Considering that the demand is so high, the prices have been increasing by 20 percent annually for the last couple of years, maybe more. Split is also interesting for local buyers, returnees, athletes, entrepreneurs, that’s why the prices are so high in elite locations like Meje.
Foreigners also invest. This situation with COVID has encouraged people to invest money in real estate because the interest rates in banks are minimal, sometimes negative, so the best investment is in real estate.”
Vulić believes that citizens buy more because of the low interest rates for savings in banks, so they think it is more worthwhile to invest in real estate.
When asked whether people should wait with purchasing or not, Vulić answered.
“If this situation continues, what you buy today for five, you will buy for six next year. Considering the prices of square meters of apartments, if you buy an apartment at a price of 3,000 euros per square metre and calculate that you will pay it off through rent, it is logical that the owners will raise the rent prices,” Vulić told N1, adding that we cannot know when and how real estate prices will settle down in Split.