In 2019 the house prices rose by 10% in Crotia. The increase places Croatia third in Europe in terms of rising real estate prices (only surpassed by Hungary and Luxembourg). The highest square-metre asking prices in Croatia are in Dubrovnik, Split and Zagreb. The largest price increases on housing was recorded in the counties Split-Dalmatia and Istria¹. The price increases on housing is mainly caused by a high demand combined with very limited supply.

The construction output in Croatia has been on the rise for 10 years, where it has been declining almost every year in the United Kingdom since 2014. The latest statitics from Croatia show an increase of 8.3% (y/y) in Q4 2019², while the increase was a mere 0.5% in the same period in the UK. The increased construction output is directly related to the positive development in the country’s economy.

Even though Croatia is subject to the economic and social consequences of the coronavirus, the country’s economy has been in progress since 2015. The positive development has been due to several factors, including their entry in the EU in 2013, but also the country’s ability to reduce the unemployment drastically since it spiked in 2014. The economic progress is also reflected in the wages and the consumption, which has been rising steadily since 2015⁴.

When we analyse real estate markets, we do not only study the property prices, but also the country’s economic key figures, political situation, social conditions etc. This gives us the best possible basis to prepare forecasts for our real estate investments.

In relation to Croatia it is our clear conclusion that the combination of 1) the continually rising real estate prices – which comes from a very low level with sufficient margin for significant price increases in many regions – with the 2) economic growth and newly found stability, gives us an optimal basis for achieving high returns on our real estate investments in the country.