House prices in Croatia post first annual decline since 2015

House prices in Croatia post first annual decline since 2015
By bne IntelliNews July 11, 2017

House prices in Croatia declined by 0.4% y/y on average in the first quarter of 2017 after posting annual increases during four all four quarters of 2016, the statistics office announced on July 11.

The construction sector crashed hard in the wake of the global economic crisis and shrank by around 30% between 2010 and 2013. However, negative trends in the sector have been reversed since the beginning of 2016. A positive contribution is expected to come from investments in infrastructure projects as the country boosts EU funds absorption. 

House prices, on the other hand, rose by 0.1% q/q compared to the last quarter of 2016, after declining 0.6% q/q in Q4 2016.

The prices of new dwellings fell by 2.1% q/q and 6.3% y/y in January-March, the statistics office said in a statement, adding that prices of existing dwellings, by contrast, rose by 0.5% q/q and 0.8% y/y in the quarter.

House prices in Zagreb increased 0.3% y/y in the first quarter, after rising by 2% in each of the previous two quarters.

Croatia's economic sentiment indicator (ESI) rose slightly by 0.5 points m/m to 115.8 in June from 115.3 in May. Confidence in the construction industry declined by 2 points from May.

Croatia’s working-day adjusted construction works index increased for the third consecutive month in April, rising by 3.3% y/y. The 3.4% annual growth recorded in March was the highest since December’s 8.8% annual rise.

The construction sector grew 3.6% y/y in the first quarter, after growing 2.4% in the last quarter of 2016, according to the latest GDP data.

The number of building permits issued in Croatia rose 18% y/y to 826 in April. Across January-April, the number of building permits rose by 32% y/y to 3,032.

In 2015, the number of building permits issued in Croatia fell 4% y/y to 6,328 while it rose 27% y/y to 8,018 in 2016.

Data

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