September 26, 2023 – The price of real estate in Croatia continues to rise. The average price of a square meter currently reaches 2,326 euros, and almost 2,700 in Zagreb. Due to expensive construction and the high prices of used apartments, the number of real estate transactions has decreased.
According to data from the Tax Administration, writes Index, more than 72,000 sales of apartments and houses were recorded last year, and about 50,000 by September of this year. In the capital alone, a drop in the number of transactions by more than 20 percent was recorded, reports HRT.
“We have a growing discrepancy between the requested and realized prices, which indicates that the requested prices are too high. We appeal primarily to the owners of used apartments to lower their expectations because we have seen a 25 percent drop in traffic since the beginning of this year,” says Lana Mihaljinec, owner of a real estate agency.
Almost every fourth property in Croatia is bought by foreigners, but even they lag in their purchases.
“The decline in transactions applies to the whole of Croatia, more or less. Germans were not the main buyers in the first half of the year, but the Slovenians. It seems that the market will continue to slow down. We do not expect a crisis, but there will be a price correction”, said Dubravko Ranilović, president of the Real Estate Business Association in the Croatian Chamber of Commerce.
Increasingly Expensive Housing Loans
Increasingly expensive home loans are not helping the buyers.
“When we compared August last year and now, we had over 20 percent fewer interested buyers who would consider real estate in Croatia. This statistic would be even more drastic if it weren’t for APN subsidies in March, which generated a certain percentage of buyers,” said Boro Vujović, owner of a real estate agency.
There is a lot of construction in the metropolis, but the problem is the lack of quality land.
“New construction also slows the increase in land prices, which have grown more than residential space. This significantly burdens the investment, but I think that in some situations, the prices are still excessive and that with these costs, land can be built more cheaply,” says Ranilović.
According to the construction permits issued in July, around 1,150 apartments are currently being built in Croatia.