Bank representatives met with Minister Branko Bacic and presented their ideas for lowering housing loan costs and housing prices in general. According to the Poslovni Dnevnik, if the two sides reach an agreement, housing costs may drop from 10 to 12%, meaning that a €100,000 apartment would cost €90,000 or less.

The meeting, however, concluded without any firm agreement. Minister Bacic reportedly told the bankers that he expects banks to lower interest rates on housing loans by at least 1%, which would result in an average percentage of around 5%.

However, bankers insist that the state also lower the VAT rate from 23 to 11.5%, with VAT claiming 17-18% of all housing costs. With this compromise, bankers expect a 10-12% drop in housing prices for all sales made after a certain date.

Participants agreed that a third party in the housing market would also have to take a cut, namely, the construction sector.

PM Jadranka Kosor is set to meet with the heads of banks in Croatia today at the Banski Dvori.