We share tips based on years of experience in property sales!
Prior to the COVID 19 situation, the real estate market in Zagreb was very favourable for the sellers and property owners. After years of the crisis which began with the collapse of the market in 2009, in 2015 we finally began to record activity and a rise in transactions. In the long-standing crisis, demand and capital accumulated, especially from buyers generating low-taxed income in the tourism sector. After the crisis, activity in the construction sector gradually picked up, interest rates on savings and loans were extremely low, and there were very few investment options besides property in Croatia. Furthermore, there was a shortage of properties in the centre of Zagreb because of the rise of 'air b'n'b's'. The generally positive economic environment, with all the above, led to an increase in prices. Towards the end of 2019, however, we saw a decline in the number of transactions, and a divergence between asking and transactional prices, which indicated that prices were too high. We were expecting corrections in the market.
Due to the pandemic, the market has come to a complete halt, and we have to wait for the movement restrictions to cease, as well as for the resulting impact they will have on unemployment and the economy, in order to conclude what will happen with the market. In Zagreb, the situation was further complicated by the earthquake, which devastated many properties. Restoration of some will take a long time, while some will remain permanently unusable. The property makret in the centre of Zagreb will segment based on the condition of the property after the earthquake.
Although things are uncertain, some market rules will continue to be in force. One of the most important criteria for buyers when choosing a property is its legality - if the house or the building in which the flat is located does not have a Building and Use Permit, it is unsellable, because banks ask for these documents when granting a loan to a buyer. Cash buyers also want proof that the property is legal. Buyers certainaly prefer properties which have clean paperwork. Here are some other criteria that will always be important.
The price-value ratio is one of the most important criteria buyers set themselves. Many will rather compromise on the location than on the price. The right asking price needs to be set, because if it is much higher than that of comparative properties, or unreasonably high, the property will be difficlut to sell. Asking prices on search engines should not be used as a basis, since they represent the owners' wishes, and are very often not the translactional prices. Consult a real estate agency, as it will have its own database of translactional prices, but will also have insight into the data of the Tax Office, which is unaccessible to the public. It is better to lower the asking price and negotiate less, than to have an unrealistically high price in the hope 'striking gold'. Price is influenced by many factors.
Location and microlocation
We all know the cliché 'location, location, location'. Until recently, one of the most sought after areas was the city cente, known as Donji Grad, in which there was almost no supply. The area has been badly affected by the earthquake and the offer will depend on what the outcome of the reconstruction will be. Maksimir has become very attractive, and a large number of new buildings have been built on this location over the past few years. Medveščak and Jarun have always been and will remain attractive, but high-quality properties at average prices are hard to find. That's why buyers have expanded their searches to other locatiosn, which is positive for the city's development, as demand generates property redevelopment and offer of amenities. Generally, properties near public transport and at least a smaller store will influence the number of interested buyers, and certainly the price. The development of infrastructure in many locations in Zagreb did not follow the development of properties, and therefore prices are lower than average e.g. in the Podsljeme area. For families, the proximity to amenities such as a school, nursery, park, and health centre is especially important. If the property is not on an attractive location, the asking price needs to be below average to generate interest.
The floorplan of the property is very important. The average buyer today is looking to get as little usable space in as few squares meters as possible, in orded to spend as little as possible overall, and yet have a good quality of life. Buyers often modernise flats in old buildings, including the layout, so those older properties which can be remodelled easily are more attractive. If the flats in new buildings have a poor floor plan, buyers will not even view them. The way which the property faces is important, as those with lots of sunlight will be brighter and have higher energy efficiency. A good view always contributes to the attractiveness of the property, but of course it is not expected in e.g. the city centre. Whether a building has a lift has become almost crucial. Very few buyers are interested a flat above the 2nd floor, if the building does not have a lift. A property with at least a little outside space is more attractive than one without. Off-street parking is also important, if there is none with the property, the price has to be adjusted.
We all need to develop an awareness that our property is not just an individual flat, but the entire building. If the flat is in a neglected building with an unrenovated façade, a damp basement, with old plumbing, wiring and roof, a high price cannot be expected. This is especially true of buildings in the central Zagreb, because the investments needed to repair such buildings are huge. The asking price has to reflect any investments a buyer will have. Buyers avoid buidlings in which the owners don't pay the service charge regularly, and which have neglected common parts. The condition of the building is more important than that of the indiviual flat, as buyers will most often carry our renovations anyway.
Ensure that all the paperwork for the property and building is in order, ranging from the title deeds, to the use and building permits.
An attractive ad with quality photos of the property is more visible to buyers. Check how the agency is presenting your property. Don't rely solely on property search engine advertising, ask the agency what additional marketing and advertising channels it uses. Agencies with good websites, which are users-friendly, get more enquiries. If you have not already cleared personal items from the property, be sure to de-clutter. A fresh coat of paint greatly improves the first impression. Turn on the lights, raise the blinds and clean up. Do not smoke, tidy away any dishes and laundry. If you have pets, take them out during the viewing and try to remove the smells. The first impression is extremely important, especially since most buyers see several properties in one day. If you trust your agent, leave the showing to them, as they understand the client's needs, so will tailor the presentation. Clients also like to inspect the property on their own, so don't be surprised if the agent steps back after the initial presentation.