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San Patrik real estate The luxury real estate market in Croatia is on the rise, and agencies like San Patrik Real Estate recognized it in time

The luxury real estate market in Croatia is on the rise, and agencies like San Patrik Real Estate recognized it in time

October 25, 2023

In the world of real estate, as in life in general, success knows no boundaries or obstacles. In just three years of independent work in this competitive industry, Ivan Varat from San Patrik Real Estate has managed to become the sole Croatian representative to join the association of the world’s best real estate agencies.

Leading Real Estate Companies of the World has been around for 60 years and brings together esteemed professionals from all continents. At a recent symposium in Dubai, in front of an audience consisting of colleagues from around the world, Varat presented the features and potential of the Croatian real estate market.

San Patrik nekretnine

Such international success perfectly coincided with two significant anniversaries – the birthday of San Patrik Real Estate and Ivan’s milestone number of candles on his cake.

Ivan celebrated the successful anniversary of his agency’s operations and his 40th birthday with numerous business associates, family, and friends on the 14th floor of Sky Office, in Business Club 5.

“In the year of the coronavirus, fear, and uncertainty, I made one of the bravest decisions in my life. I started my own business, and it turned out that I made the right decision. San Patrik agency has been operating for three years, which is relatively short for a business, but this year I became a member of the Leading Real Estate Companies of the World, which confirmed that I’m on the right track. I returned to Croatia full of ideas and motivation to raise professional standards,” said Ivan Varat, director and owner of San Patrik Real Estate.

Real estate business is challenging but full of opportunities

Properties are bought and sold due to various life circumstances. Varat’s fate was determined by a family situation when, in 2015, he had to undertake the sale of family properties and realized he had a knack for it. He continued professionally as a real estate agent in a major international real estate agency until 2020 when he decided to rely on his own strengths and opened San Patrik Real Estate. He was not deterred by the global health and economic crisis at its peak. He was focused on passion and a vision that drove him to quickly specialize in a narrow area. Luxury properties are usually more stable and less sensitive to economic shocks or short-term market changes, says Ivan Varat, who with two MBA degrees in economics, from ZŠEM in Zagreb and Luiss Business School in Rome, carefully analyzes macroeconomic indicators. The luxury property market in Croatia is on the rise, he says, and expects this trend to continue in the upcoming period.

Ivan Varat San Patrik

The luxury property market is recording growth

San Patrik is an agency specialized in residential and luxury properties in Zagreb and on the coast. The focus is on the quality of the offer rather than the quantity, as the definition of luxury changes. The trend is such that a luxury property does not just mean high construction quality, but also a prime seafront location, privacy, spaciousness, ecological sustainability, and proximity to airports. Such opportunities are rare and thus highly sought after, further contributing to their value increase. Residential property prices range from 150 to 500 thousand euros, and for luxury properties with sea views and additional amenities, buyers are willing to spend from one million euros upwards. Croatia is an attractive destination for such buyers, and with the increased demand post-COVID-19 pandemic, on the coast and islands, we are noting higher prices, says Varat from his experience.

Interestingly, most luxury property buyers invest in these assets in Croatia as their second home – a place for relaxation and enjoyment in everything our country offers. Although we are on the right track, there is still room for improvement, especially when it comes to offers tailored for high net worth individuals (HNWI), or affluent buyers. In my presentation in Dubai, I emphasized, says Varat, that Croatia has great growth potential in luxury real estate and sustainable development.

How affordable are properties for local buyers?

In Croatia, there are two primary real estate markets: Zagreb and the coastal area. While most buyers on the coast are foreigners, in Zagreb, 95% of buyers are locals, often purchasing apartments for personal use or as an investment, for short-term or long-term rental. How affordable properties are for locals can be seen by analyzing the latest data from the Ministry of Construction and the Economic Institute of Zagreb. It is evident that since 2015, property prices have been growing faster than wages. Specifically, while wages increased by 49.7%, property prices jumped by 79.6%, making them less affordable. Here’s another interesting fact: in 2022, 116,734 transactions were concluded, a decrease of nearly 13% compared to the previous year. However, the total transaction value increased by 6.3%, reaching 8.5 billion euros or about 13% of Croatia’s GDP.

San Patrik Real Estate Croatia LeadingRE

We are leading in the EU in price growth; will the trend reverse?

Although the number of transactions has decreased, prices have continued to rise. According to data for the second quarter of 2023, Croatia is first in the EU in terms of price growth (13.7%) on an annual basis. At the same time, some other countries like Germany (-9.9%), Denmark (-7.6%), and Sweden (-6.8%) are seeing price declines. Also, according to the latest data from the State Statistical Office, in the second quarter of this year, residential property prices were on average 3.5% higher than in the first quarter of 2023.

I understand the impatience of local buyers for this trend to change, especially those looking for their first property. Since March, when the last round of the APN ended, there has been a decline in demand. We do not expect a sudden drop in prices, says the owner of San Patrik Real Estate, but it’s realistic to expect price stagnation.

In the luxury property segment, the situation is slightly different. Here we are talking about buyers with a stable financial situation, often not dependent on loans, looking for properties in exclusive locations offering privacy. Since we lack such properties, we can expect prices to remain high, without significant corrections in the near future.

The article was also published on the Stanarica.hr portal

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