New cycle in Croatian real estate as market slows

Croatia

ZAGREB, 19 May (Hina) – The Croatian real estate market has entered a new cycle, marked by a slowdown, which primarily reflects the decline in real estate sales, it was said on Thursday at the opening of the 37th Real Estate Business Forum in Zadar, organised by the Croatian Chamber of Commerce and the Real Estate Business Association.

The increase in interest rates and decline of the market in many EU countries, the insufficient construction of new apartments for medium and lower-paying customers and the unrealistic expectations of sellers, especially those in older buildings, had a strong impact on the real estate market, according to a statement from the HGK.

“All this has led to a large increase in the asking prices of residential properties over the past few years. The unsustainability of such an approach to the market can be seen in the drop in sales in 2023 of as much as 6.9% and the drop in purchases by foreigners of 7.1%,” said the president of the HGK Real Estate Business Association, Dubravko Ranilović.

Most properties, especially used ones, are not being sold at the asking price and owners will have to adjust their prices soon if they want to find buyers, he added.

The real estate market in Croatia is still polarised. On the one hand, the market is very active in Zagreb and on the coast, while in central and eastern Croatia, demand and activity are much lower, except in a few larger cities.

Coastal property

However, according to the association’s vice president Ivan Bižanović, certain changes are noticeable.

“It is not the dynamic we would like, but positive trends can still be seen. Much less is being said about the potential of the real estate market in Slavonia, Lika, the Dalmatian hinterland and central Croatia, but it is not negligible. Looking at these regions, we have great examples of the positive impact of economic development on the real estate sector, from tourism to energy, and we believe that this trend will become increasingly visible,” said Bižanović.

The focus of the spring edition of the Real Estate Forum is housing affordability, one of the most important issues for the real estate market and society as a whole.