Real estate – investing in the future
Croatia is a famous tourist destination with a fantastic lifestyle for many years. The indented coast with 1244 islands is every year more recognizable all over the world. It is one of the top 20 leading countries in the world in terms of tourist traffic. Although tourism is developed in almost all parts of this beautiful country, most overnight stays are realized on the coast.
Tourists from Germany, Slovenia, Austria, Poland and the Czech Republic spend the most nights. Due to its geo-traffic position and natural beauty, Croatia is predicted to become an even more important tourist destination in the future.
The data shows that almost 90% of Croats own their real estate. Those results places Croatia in the top five countries with the highest percentage of domestic real estate ownership. (Source: Eurostat)
In other countries, people invest in stocks, gold, cryptocurrencies or have classic savings in a bank. In Croatia, there is still a strong trend of investing in real estate. Croats believe that investing in real estate is the safest investment. Especially in a country where approximately 20 million tourists flock annually. In addition to that it is safe and comfortable country to live in!
In any case, apart from the lucky ones who can already place the “Zimmer frei” sign in front of their house, many dream to own property in the one od most beautiful coasts in Europe. Apart from Croatians, buyers from neighboring countries, especially Germany, Slovenia and Austria, also understand the potential of Croatian real estate.
If you have already started thinking about buying real estate with the aim of generating an additional source of income, it is necessary to understand price trends and know the situation on the Croatian real estate market. In particular, real estate prices in Croatia primarily depend on the location, of which the Adriatic is certainly the most desirable. Although prices in tourist destinations are skyrocketing, one can still find a great opportunity that quickly pays off.
In addition to the location, the price is defined by the size of the property and land, parking spaces and, clearly, the condition of the property (need for adaptation or not).
This year, as well as the previous ones, due to the pandemic situation, much lower revenues from tourist rents are expected, which will certainly affect the real estate offer. What is certain is that luxury real estate prices are not falling. On the contrary, prices have risen. from 2015/2016 year and for as much as 17% and prices range around 2400 € m2.
The main factors of price growth are still relatively low prices (depending on the location) compared to some other Mediterranean countries and the constant growth of tourism, which is a great opportunity for buyers from countries with good economic situation. Also, it should be noted that the real estate tax in 2019 was reduced to 3% (for domestic and foreign buyers). More information on real estate taxes in Croatia can be found here.
Graph (1) shows the results on Google search in the period from January 2019 to March 2021. In the selected time period, real estate in Croatia is mostly searched by Croats, followed by Slovenes and Germans.
Graph 1 – Search for the term “Real Estate in Croatia” in the period from January 2019 to March 2021
Graph (2) shows that the trend of searching for the term “Real Estate in Croatia” on Google search is constant, ie interest in Croatian real estate is not falling. The largest real estate searches were in October 2019, as well as in September 2020, despite the crisis caused by Covid 19. The peak of demand in Germany was at the end of 2020 and the beginning of 2021, while Slovenians searched for real estate in Croatia the most in November and October 2020.
Graph 2 – Search for the term “Real Estate in Croatia” in the period from 2019 to 2021
The highest real estate prices are found in the areas of Rovinj, Split, Opatija, Dubrovnik and Hvar with prices over € 3000 m2. Followed by the islands of Brac and Krk with prices between 2700 – 3000 € m2. In third place in terms of real estate prices are Cres, Losinj, Crikvenica, Umag, Trogir, Primošten and the area of the city of Zadar where real estate prices range between 2300 -2700 € m2.
Tourism in Croatia is growing every year, and the average rental prices of apartments, villas and holiday homes have grown proportionally. The purchase and sale of real estate is greatly influenced by tourism, and for this reason real estate prices in some parts of Croatia never fall.
Buying real estate in Croatia for many reasons is an excellent investment, ie an investment in the future. This is confirmed by the growing trend of prices and interest in buying real estate in Croatia from neighboring countries, especially Germany and Slovenia. The crisis caused by Covid 19 is also affecting the return of many Croats, which further raises demand.
Banks offer favorable lending models when buying real estate not only to citizens of the Republic of Croatia, but also to foreigners. Eurozone citizens can get a loan to buy real estate. Repayment periods are up to 20 years, and there is an option to repay the loan for up to 12 months.
As a company with many years of experience, we believe in the motto “Invest & Earn” and we know that buying real estate in Croatia pays off many times over. If you are looking for a property or land to build the same, you can contact us. We are here for consultations and advice on the purchase, construction, investment and successful implementation of projects, and the maximum simplification of the process of buying or building real estate in Croatia.
Buying a property requires a lot of commitment and requires a lot of time to resolve all legal proceedings before and after the sale. Also, specific information is difficult to find in one place, often exclusively in Croatian. Our clients from other speaking areas especially appreciate our accessibility and turning the often stressful buying process into a wonderful adventure.
In one of the following blogs, we will write about the most important guidelines that you need to pay attention to when buying real estate in Croatia.
GL Real Estate team