Escalating Real Estate Values, Demand for Family Homes on the Rise
In 2018, Croatia's real estate market witnessed a surge in activity, with approximately 13 billion kuna generated from flat sales alone. According to data from the Zagreb Institute of Economics and the Construction Ministry, a total of 104,000 real estate transactions took place in the country, with the number of flats changing hands in Zagreb increasing by 1,500 to 24,000.
The median price of flats in Zagreb increased by 4.9% to 9,459 kuna per square metre, while in Split-Dalmatia County, the median price rose by 8% to 11,669 kuna per square metre. The highest median price for family houses was recorded in Dubrovnik, at 12,000 kuna per square metre. In coastal and island towns and municipalities, the price of a square metre of a house ranged from 5,000 to 10,000 kuna.
In contrast, in 190 towns and municipalities in continental Croatia, the price of a square metre of a house was below 1,000 kuna. Around 6 billion kuna was generated from construction land sales in 2018, and approximately 5.7 billion kuna was generated from family house sales. The total value of properties sold in Croatia in 2018 was 32 billion kuna, which is 8.4% of Croatia's GDP.
While no specific 2018 data on total sales, GDP contribution, or sales of construction land or flats in Zagreb was provided, it is known that Croatia's construction and real estate sectors have been vibrant due to catch-up growth following EU integration and significant EU funding inflows. Zagreb, as the capital city, emerged as the dominant real estate market, with higher transaction volumes and prices compared to other regions.
The sale of farmland dominated real estate transactions in 2018, with nearly 40,000 transactions. However, the value of farmland sold in 2018 was 1.6 billion kuna, a decrease from 2017. The dynamics of Croatia's real estate market are influenced by EU funding, housing policies, real estate taxation, and infrastructure investments, contributing to regional variances in construction activity and property values.
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Investing in real estate, particularly flats in Zagreb, showed promising potential in 2018 as the median price increased by 4.9%. This surge in the real estate market contributed significantly to the generation of 32 billion kuna from property sales, which accounted for 8.4% of Croatia's GDP.
