Why buying an apartment in Croatia is becoming increasingly difficult
Property prices are rising rapidly, and purchasing an apartment in Croatia is becoming increasingly difficult. This trend is also characteristic of the rental sector, where a limited supply compounds rising costs. All this makes it almost impossible for young people to buy homes.
To understand the picture, economic analyst Ivica Žuro provides data on the Split market:
– renting a one-bedroom apartment in the city costs 600 euros a month;
– previously, a two-room apartment could be rented for 350-550 euros a month;
– now the monthly rent for such an option is 700-1500 euros.
A citizen with an average income can buy a 20-square-metre house in Split. To do so, they need to take out a loan of 81,000 euros for 30 years.
Against the backdrop of high-interest rates, the decline in the purchasing power of citizens is more acute. Many buyers and tenants refuse the services of estate agents because they cannot afford them.
The most vulnerable group of consumers in the country are young people. They have to work hard to pay rent and utilities. As a result, after the obligatory payments, almost no money is left for other needs.
Overview of the property market of Croatia
In 2023, housing prices in the country will increase by 21%. A square metre of housing in Croatia will cost around 3,223 euros. The price of houses has risen even more – by 40% to 2,606 euros per square metre. According to the Dubrovnik Times, the biggest increase was in the coastal regions:
– an apartment in Istria County costs 3,836 euros per square metre. A house costs 3183 euros per square metre;
– a square metre of flat in Dubrovnik-Neretva County costs 3602 euros. Houses are sold for 2960 euros per square metre;
– apartments in Split-Dalmatia cost 3590 euros per square metre. The price of a house is 2960 euros per square metre.
In the capital of Croatia, a square metre of flat costs 2987 euros. A house in the Zagreb market is available for 1795 euros per sqm. In Rijeka, the price increase in the apartment sector was 26%. Sellers are offering one square metre for 2661 euros. In Split, the cost per square metre has increased by 20% over the year. An apartment in the city costs 4061 euros per square metre. In Osijek, prices rose by 17% to 1733 euros per square metre.
Along with the increase in property prices, the activity on the market has decreased. During the year under review, 66.7 million property transactions took place. For comparison, in 2022, this figure was 72 thousand housing units. Activity has decreased not only on the part of domestic buyers. The number of transactions with foreigners fell by 25%.