Foreigners buy every fourth property in Croatia. But overall activity in the market is declining
Every fourth property in Croatia is bought by foreign investors. But despite this, the market has witnessed a decrease in the turnover of residential properties and price adjustments.
The average price per square meter of real estate in Croatia an impressive €2,326. In the capital, Zagreb, it is above €2700 per “square meter”. These figures are due to the high cost of new construction and expensive offers for used apartments.
Experts note that, due to high real estate prices, the number of real estate transactions has decreased. Data from the Tax Administration show that last year there were more than 72 thousand transactions for the purchase of apartments and houses, and by September this year, there were about 50 thousand. A decline of more than 20% in the capital city of Zagreb alone indicates the need for price adjustments.
Almost one in four properties in Croatia is purchased by foreigners. However, even they are starting to slow down the pace of purchases. Dubravko Ranilovic, president of the Association of Real Estate Entrepreneurs, notes that “the drop in transactions concerns the whole country, and we expect a price correction.” Slovenes, not Germans, were the main buyers in the first half of the year.
Although new building construction in Croatia is strong, there needs to be more quality land. Rising land prices have also had a significant impact on their investment attractiveness. That said, according to official figures, there are currently about 1,150 apartments under construction in Croatia. This is clearly not enough for all those who wish to buy, for whom real estate remains the most profitable investment.