2020 - YEAR OF SHOCKS - ASSESSMENT OF IMPACTS ON DWELLING PRICES IN CROATIA

The past year (2020) was marked by shocks that shook the Croatian economy in various spheres. First and foremost, the Covid-19 pandemic and consequently full and/or partial economic lockdown initially slowed down economic activity and then resulted in record negative GDP growth rates. Immediately after the declaration of the world pandemic, the capital of Croatia was hit by another unforeseen shock in the form of a strong earthquake. This paper assesses the effects of these events on Croatian dwelling prices, but also looks into the effects in individual regions (Zagreb, Adriatic and others). At the same time, the effect of housing loan subsidies, which is not exclusively related to 2020, is being assessed. The hedonic model of estimating the requested and achieved housing prices showed that the pandemic is not significantly related to housing price developments in Croatia, while housing loan subsidies can be linked to rising prices in certain market segments. Also, according to the analysis results, the earthquake in Zagreb can be related to the prices growth in the segment of newly built dwellings.