Can young people in Zagreb afford to buy an apartment?
Zagreb, as the capital of Croatia, attracts many young people who are looking for stability and opportunities for personal development. However, the real estate market in Zagreb has become a challenge for young buyers. Below we will explore the current situation and conditions of how to buy your first real estate?
The current situation in the real estate market
Real estate prices in Zagreb have increased in recent years, and this is especially true for popular city districts such as Centar, Maksimir and Trešnjevka. According to statistics, the average price per square meter in Zagreb in 2023 is about 2,500 to 3,500 euros, depending on the location. This price increase often exceeds the possibilities of young people who are just getting a job or are at the beginning of their careers.
Financial issues
One of the key factors affecting the possibility of buying real estate for young people is the financial situation. Most young people do not have enough savings to pay for the entire property in advance, which forces them to borrow. Banks usually offer housing loans, but the conditions for granting loans are strict. Young people often have to prove a stable income, which can be challenging for those just starting their careers.
Alternative options
Given the high prices, some young people opt for alternative options, such as shared housing or renting. Although rent can be a temporary solution, in the long term, young people face the problem of a constant rise in rental prices, which often does not reflect the quality of housing.
Also, some young people are considering investing in smaller properties or real estate outside Zagreb, where prices are more affordable. Recently, there has been a growing interest in real estate in the surrounding cities, such as Zapresic orVelika Gorica.
If we want to have affordable housing and if we want our youth to stay living in Croatia, the policy should make real estate available through e.g.
1. Subsidizing housing loans
- Interest reduction: Introduction of a program that would allow young people to subsidize interest on housing loans, thereby reducing monthly repayment costs.
- Increase in the repayment period: Allow longer repayment terms to make monthly installments more affordable.
2. Incentives for the first property
- Financial support: The introduction of one-time financial grants for young buyers of first real estate, which would help them cover the costs of the initial deposit.
- Exemption from taxes: Exemption from paying real estate sales tax for young people up to a certain age or for purchases below a certain amount.
3. Shared Housing Programs
- Support for shared rental: The introduction of a program that would encourage shared rental housing, including financial support for landscaping or renovation costs.
4. Development of affordable housing
- Construction of social housing: State investment in the construction of affordable social housing, especially in popular urban neighborhoods.
- Return for investors: Encouraging private investors to build affordable housing with rebates or tax breaks.
5. Education and Counseling
- Information programmes: Organizing information workshops for young people on available incentives, purchasing processes and financial plans.
- Advisory services: Provision of free advisory services related to housing loans and purchase options.
6. Digitalization of processes
- Online Platforms: Development of digital platforms that would make it easier for young people to search and compare properties, with the possibility of simply signing up for incentives.
7. Incentives for working from home
- Remote work support: Incentives for young people working from home, to consider moving to more favorable cities or settlements outside Zagreb, with support for the costs of relocation.
By implementing these measures, the government could significantly facilitate the entry of young people into the real estate market in Zagreb, thus stimulating demographic renewal and economic development.
Conclusion
It is not easy for young people in Zagreb to afford real estate to buy, especially in light of high prices and stricter lending conditions. Nevertheless, with alternatives such as shared housing or investing outside the city, there are several options that can facilitate the entry of young people into the real estate market. The key to a successful purchase lies in informing, planning and considering the different options available to them. In the future, changes in housing policy and the real estate market could further improve the situation for young buyers.
With ourexpert consultation get information; How to buy your first property.
published on 07.10.2024 year