Croatia Leads the EU in Real Estate Price Growth
It is noteworthy that average prices of residential buildings have increased by 10% year-on-year. Croatia thus stands at the top of the EU regarding real estate price growth. Within the eurozone, it recorded the highest annual growth from April to June. Following are Portugal with a growth of 3.9%, Spain with 3.6%, Bulgaria with 3.4%, and Italy in fifth place with 3.2%. At the other end are Belgium and France, where prices remained unchanged. According to data from the Statistical Office, the average price per square meter of a new apartment sold in Croatia in the first half of 2024 reached 2,377 euros. This represents an increase of 7.1% compared to the same period last year and 4.3% more than in the second half of 2023. In Zagreb, the average price was 2,830 euros per square meter, which is 7.9% more than the year before last. In other cities, the average price was 2,059 euros, an increase of 7.5%. Specifically, in Zagreb, prices increased by 7.7% year-on-year to 2,835 euros, while in other locations they rose by 6.3% to 2,177 euros.Factors Influencing Real Estate Prices in 2025
The year 2025 brings new hope for those who wish for their own home."The real estate market will mainly depend on two factors: tax policy and housing policy. Property taxes, rental income, and the need for tenant consent in tourist rentals will have a significant impact on the market," said the owner of the real estate agency Boro Vujović.
Vujović also emphasizes the importance of interest rate movements on loans. "When we look at our real estate market, Germany and Austria are crucial for us, as approximately a quarter of our clients come from there. Therefore, the economic situation in these countries is important for us. The tourist season also impacts real estate prices, and of course, there's inflation, which directly affects prices, especially new constructions," he added.
Possible Price Corrections for Some Properties in 2025
"Our forecasts about a decline in real estate turnover have come true this year. We also expected the price growth to halt. Now we are observing whether prices in the second quarter are higher compared to the same period last year. According to our statistics, it seems we've ended the phase of price growth. In the coming period, we can expect a lower number of transactions due to insufficient supply, but price corrections will only affect a portion of properties influenced by the new legislation. This does not concern new constructions," emphasized Vujović."For example, in the center of Split, people bought apartments to rent out and may sell them because of the new law that requires consent. In Zagreb, the number of apartments intended for short-term rental is negligible because most are in the center. Moreover, the earthquake did not bring a significant increase in traffic in Zagreb, so this provision will have minimal impact," he explained.
Decline in Prices of Older Properties?
The question remains whether there will be a decrease in prices of older apartments with an overvalued price per square meter."We are still seeing demand for real estate, but the supply is insufficient. Owners, especially of older apartments, compare their prices with new constructions in the area or slightly adjust them. Now we have the announcement that 10% VAT will be returned to the buyer, so it will be necessary to adjust prices further if owners of older apartments really want to sell," explained Vujović.
In the first half of 2024, 67,415 real estate sales were made, which is a slight decrease of 0.86% compared to the previous year. The most sold were apartments sized between 45 and 65 m². The most popular districts in Zagreb are Trešnjevka North and Novi Zagreb - East. In some counties, an increase in sales was recorded, such as in Primorje-Gorski Kotar County by 16% and Zagreb County by 13.5%.
The year 2025 will undoubtedly be interesting. New laws will influence the movement of real estate prices and inflation, bringing uncertainty in many areas, including the real estate market. It remains to be hoped that the "real estate bubble" will finally burst.
