You have probably all noticed that real-estate prices in Croatia have gone through the roof. Here are my thoughts and possible explanations as to why this has happened.
When the coronavirus pandemic began in early 2020 and we unfortunately had to close our office for a month and a half, like many other service businesses in Croatia, we could not even imagine what would happen a year later.
Since everything seemed rather uncertain, all of us in this line of work wondered whether we would survive at all. We thought that, after hearing about the pandemic and this new and strange disease, nobody would feel like buying property anymore, especially in Croatia, where the market largely depends on tourism.
As 2020 was not a good year for tourism either, we were convinced that many landlords would no longer be able to rent out their properties and would therefore have to sell them. From that way of thinking it followed that there could be a lot of properties on the market in Croatia and very few buyers, which would lead to prices starting to fall. The forecasts of many experts, including ourselves, were not encouraging at all.
However, none of that happened.
Exactly the opposite occurred.
Already in the spring of 2021, interest in buying property by the sea in Croatia began to grow rapidly. It also turned out that the 2021 tourist season was actually excellent, and landlords had no intention of selling anything. As tourists arrived, so did property buyers. Properties that had just appeared on the market were listed with very high prices from the outset, and those already on the market somehow sold faster than usual.
POSSIBLE REASONS FOR THE RISE IN PROPERTY PRICES
These are my insights into the possible reasons for the increase in property prices in Croatia, which I have gathered through conversations with sellers, buyers and fellow agents.
1. Saving money in banks is not worthwhile
Many people believe that interest rates in banks are extremely low and that it simply does not pay to keep money in banks. Therefore, most people think that property is always property and that you cannot lose money on it. In addition, there is no property tax in Croatia. You can use a property, rent it out, or eventually sell it again. Someone before me once said that people most like and most often save “in bricks.” Whenever a more substantial amount of money is saved, demand for real estate increases, and when demand rises, property prices go up.
2. The introduction of the EURO
When we ask our clients who purchase property through our agency, they all mention the euro. Foreign buyers in particular, based on their experiences with property prices in their own countries, are convinced that prices in Croatia will continue to rise, so they simply want to buy their desired property by the sea as soon as possible. They want to spend their money right here with us. So—welcome!
3. Rising prices of construction materials
Lately we have been hearing and reading about major increases in the prices of construction materials and building costs in general. In addition, there is not enough labour available on the market in Croatia. As a result, costs for builders and investors have risen significantly, and in order to make a profit they are increasing the prices of the properties they build.
4. Fewer remaining building plots
There are fewer and fewer building plots available for sale in Croatia, which landowners are well aware of and are charging more for them. This is another reason why a completed property ultimately costs more than before.
5. The corona situation in the summer of 2021 combined with beautiful weather
Since Croatia had a relatively favourable situation with daily infection numbers in the summer of 2021, it was in the green zone. Let us recall that other sunny countries at that time had a worse situation with infections and were not on the green list. As tourists were not allowed to travel to other attractive summer destinations, streams of tested tourists flowed into Croatia, and we recorded an exceptionally successful tourist season.
In addition, the summer of 2021 was truly hot and rainless, which for foreigners from northern countries felt like paradise on earth. Both those who had been spending their summers here for years and those who came for the first time realized that the combination of sea and sun is excellent for living and that it would be good to buy something in Croatia. Foreigners in particular developed a strong desire to secure accommodation of their own by the sea so that 2020 would not repeat itself, when they could not come to our coast unless they owned property. Moreover, since they did not travel anywhere in 2020, they managed to save even more and increased their budget for purchasing.
INCREASED INTEREST IN BUYING
For all these reasons, interest in purchasing property on the coast in Croatia simply kept growing. Those who were selling did so at good prices. When sellers with lower prices saw that some properties had been sold at high prices, they also raised the prices of their own properties. Some did not succeed, but most did. In this way prices kept rising continuously.
I should point out that in our agency the greatest increase in interest has been in apartments, with houses in second place, then land, while commercial properties are in last place.
And one more very important point: it has become clear that newer and more luxurious properties, as well as those that are better built and more beautifully furnished, are now selling better and more often in Croatia. From all this it can be concluded that the real-estate market regulates itself, and that older properties cannot achieve the same price as new ones.
Many say that prices are already quite high, so it is difficult to predict how long this situation will last and whether prices will fall or continue to rise. At the time of writing this text, in December 2021, the market in Croatia is still very dynamic and demand remains strong, which makes any long-term forecast highly uncertain.
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Author:
Jasminka Fišer Gavranović – Owner of Alfa nekretnine real estate agency in Vodice, licensed real estate agent and home staging expert
📍 Alfa nekretnine, Obala Juričev Ive Cote 27, Vodice
📞 Tel.: 022 441 292 | Mob.: 091 525 3260
✉️ Email: info@alfanekretnine.hr
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About the Author
Jasminka Fišer Gavranović is a long-standing licensed real estate agent with many years of professional experience. Born in Slavonia and raised in Zagreb, she spent a short period living in London before eventually settling with her family in Dalmatia, in the beautiful coastal town of Vodice.
After working in a variety of professions in Zagreb, she found her true calling in the real estate sector in Vodice—a field she genuinely enjoys and now runs together with her husband, Frano.
Since 2005, she has been actively involved in real estate brokerage, specializing in property sales and purchases. Together with her team at Alfa Nekretnine, she has initiated and managed a number of distinctive projects that have set the agency apart on the local market. One of her proudest achievements was participating, in 2011, as one of the few real estate professionals in Croatia, in the popular American half-hour TV show “House Hunters International.” In the episode, she hosted her Australian client and guided them through the property-buying process in Vodice, showcasing the town to viewers around the world. This proved to be excellent promotion not only for her agency, but also for the destination of Vodice itself.
Through many years of hands-on work in real estate, she has seen every kind of apartment and house imaginable. In 2018, she decided to take a step further and enter the world of home staging. She completed her professional training in English in 2014, earning the title “Certified Home Staging and Property Styling Professional,” followed by the “Home Staging Business Training Program.” With this, she rounded out all the knowledge she considered essential to pursue this new and dynamic field, becoming a leading home staging expert in Croatia.
In addition to her active presence on social media and delivering educational presentations on home staging, her other professional interests include writing, public speaking, and communication skills.