Croatian Property Prices Soar 13.2% Year-on-Year in Q2 2025

Significant Growth in Residential Property Values

Residential property prices across Croatia recorded a substantial increase of 13.2% year-on-year in the second quarter of 2025, according to fresh data released by the Croatian Bureau of Statistics (DZS). This marks a continuation of the upward trajectory in the nation's real estate sector. On a quarterly basis, prices for residential properties rose by 4.4% compared to the first quarter of 2025.

A closer look at the market segments reveals that existing housing stock experienced a more pronounced surge, with prices climbing by 13.7% year-on-year. In contrast, newly built homes saw an 11% increase over the same period. Regionally, the price growth varied:

• Prices in Zagreb were up 12.2% year-on-year.
• The Adriatic coast saw an increase of 12.3% year-on-year.
• Other regions of Croatia recorded the sharpest rise, at 18.2% year-on-year.

Key Drivers Behind the Price Surge

Several interconnected factors are contributing to Croatia's booming property market. A primary catalyst is the country's thriving tourism industry, which generates significant demand for vacation homes and short-term rental properties. Reports indicate that over 10% of the housing stock in coastal areas is now dedicated to vacation rentals, effectively reducing the supply available for traditional residential use.

Foreign investment also plays a crucial role, accounting for more than one-third of all property purchases. Buyers from Germany, Austria, and the UK remain significant players, with increasing interest noted from North America, China, and Scandinavia. Croatia's accession to the European Union and the adoption of the euro in 2023 have further enhanced its appeal by eliminating currency exchange risks and simplifying transactions for Eurozone investors, thereby boosting market liquidity and investor confidence. Additionally, sustained economic growth, rising wages, and limited housing supply, coupled with increasing construction costs, continue to exert upward pressure on prices.

Long-Term Trends and Market Outlook

The recent growth is part of a broader, long-term trend. Croatian property prices have surged by an estimated 68-74% since 2013, and have seen an average annual increase of 8-12% since 2017. Between 2010 and Q2 2025, house prices in Croatia more than doubled, showing a 102% increase. While the market is expected to continue its upward trajectory through 2028, some experts anticipate a moderation in the pace of increases, potentially settling at 5-7% annually by 2026. Despite this, major price drops are not foreseen, alleviating concerns about a potential market 'bubble' bursting.

New regulations, including the introduction of an annual property tax in 2025, are also shaping the market landscape. Furthermore, potential government measures aimed at restricting short-term rentals could influence the supply of long-term rental properties in the future.