After the spring of 2021, the spring of 2022 will bring a new opportunity to young families who are looking for their own home through a new round of APN loans, subsidized housing loans for young people.
What are APN loans and why are they popular?
APN loans are loans for young people that are partially subsidized by the state, and are intended for the purchase of a first property. The state helps by paying off part of the housing loan, and the amount of the state subsidy depends on the development of the place where the property is purchased. The length of the aid is limited to the first five years of repayment.
Subsidy amounts range from 30 to 51%, and the interest rate ranges from 2 to 3%. For example, for the purchase of real estate in Gunja or Okučani, you will receive a 51% subsidy on the monthly loan installment, while this amount for Zagreb is 30%.
Persons who can apply for the purchase of real estate are all Croatian citizens under the age of 45 who, like their partners, do not own real estate or own only one real estate that is usable and is being sold in order to buy a larger real estate.
Subsidization is approved for the purchase of an apartment or house whose price does not exceed 1,500 euros per square meter, and if it exceeds, the state does not subsidize the difference in the amount. The total loan amount is limited to EUR 100,000 and the minimum repayment period is 15 years. In addition, after the purchase, the buyer must own the property for at least 2 years after the end of the period subsidized by the state.
In case you have children, the period of the subsidy is extended, so the state helps for another year for each child, and if you have children during the duration of the subsidy, the state will help for another two years.
APN loans maintain real estate prices
With the appearance of APN loans and the increase in inflation in the last few years, the price of real estate has increased greatly, especially in large cities such as Zagreb and Split. In the last two years, the price per square meter of real estate in those cities has increased by up to 30%, which is a huge difference in price. This means that in 2021, for the same money as in 2019, you can buy almost a third smaller property.
Users of APN loans are mostly interested in buying new buildings, which is particularly evident in Zagreb, where after the recent earthquake, newer properties are being bought, solidly built and reinforced just for such cases. The current price in the city of Zagreb for new construction ranges between 3 and 4 thousand euros per square meter, and in the outskirts of the city up to 2,500 euros. Some properties in the city center have extremely high prices per square meter, which range up to 8 thousand euros per square meter.
Real estate prices have risen partly due to the appearance of APN loans, partly due to the low credit rates offered by banks when taking out housing loans, but also due to the growing desire of young people to become independent and move out of the properties they share with their parents.
Is it profitable to take an APN loan?
Although the price of real estate has increased, it is still possible to find a large number of real estate at an acceptable price, especially when you consider that the state will reimburse at least a third and at most half of the loan amount in the first five years. Particularly interesting are houses and apartments on the outskirts of the city, in areas where there is a lot of nature and greenery, which is an ideal position for young people to raise a family.
It is important to note that young married couples, after buying real estate, usually start expanding their families, and here too they take advantage of the possibility of extending the subsidy for several years, depending on how many members the family grows during the subsidy period.
Considering that real estate prices will continue to rise, and that the current subsidy plan is contracted until 2024, it would be a shame to miss the opportunity to get an apartment at such low interest rates and with the help of the state, especially if you were planning to buy real estate.
