Authored by the expert who managed and guided the team behind the Croatia Property Pack
Yes, the analysis of the Croatian Islands' property market is included in our pack
What will happen in the Croatian Islands’ real estate market? Will prices rise or fall? Are islands like Hvar and Brač still attractive to foreign investors? How is Croatia’s government influencing real estate policies and taxes in 2025?
We’re frequently asked these questions because we’re deeply engaged in this market. Through our collaborations with local real estate agents, property developers, and international buyers, we’ve gathered firsthand insights.
That’s why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive perspective on market predictions and forecasts.
Our aim is straightforward: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Energy-efficient homes will become more attractive to buyers due to new green taxes
Green taxes are set to make energy-efficient homes more attractive to buyers.
In Croatia, there's been a buzz around energy-efficient homes, especially in 2023 and 2024. New dwelling sales shot up by 25.9%, particularly in coastal and holiday spots. This shows a clear shift towards homes that promise energy savings and sustainability.
The Croatian government is sweetening the deal with new property tax incentives. They're offering co-financing for energy renovations, which means you can get help with things like better thermal protection and renewable energy systems. These perks make energy-efficient homes a hot ticket for buyers.
People are catching on to the benefits of sustainable living. Surveys reveal that many are drawn to energy-efficient homes because they can slash utility bills. Take Croatia's first passive house, for example—it has energy costs of just about 300 euros a year. That's a big win for anyone looking to cut down on expenses.
In coastal areas, where the sun is abundant, solar panels are becoming a common sight. Homeowners are not just saving money but also contributing to a greener planet. This eco-friendly trend is making these homes even more desirable.
With these incentives and the growing awareness of environmental issues, energy-efficient homes are not just a trend—they're becoming the norm. Buyers are increasingly looking for properties that offer both financial and environmental benefits.
Sources: Balkan Green Energy News, WIT Press
2) Interest in properties near spas and wellness centers will grow due to the rise in wellness tourism
The popularity of wellness tourism has been on the rise globally, with the market expected to reach $1.1 trillion by 2025. This growth trend, observed since 2023, indicates a strong and increasing interest in wellness-focused travel experiences.
In Croatia, there has been a notable increase in the number of wellness centers and spas, with around 80 hotels and various wellness facilities now available. This expansion reflects the growing demand for wellness tourism in the region, particularly from foreign visitors who are drawn to these health-focused destinations.
Economic reports have shown that wellness tourism significantly contributes to Croatia's GDP, with projections suggesting a rise to 31.7% by 2028. This economic impact highlights the potential benefits of investing in properties near wellness centers, as the demand for such locations is expected to continue growing.
Case studies, like that of Varaždinske Toplice, demonstrate the success of wellness tourism destinations, with substantial overnight stays driven by health-focused visitors. This success story suggests that properties near thriving wellness centers could see increased value and demand.
Sources: Tourism and Sport in Croatia, Advantages and Challenges of Health Tourism Development in Croatia
We have made this infographic to give you a quick and clear snapshot of the property market in Croatia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Properties with panoramic sea views will keep fetching high prices
Properties with panoramic sea views have consistently commanded premium prices, and this trend is expected to continue. In the past few years, from 2023 to 2024, coastal property prices in Croatia have surged significantly. For instance, in Istria, prices increased by 36%, while Central Dalmatia saw a 25% rise. This upward trend is largely driven by the growing demand for coastal homes, fueled by a surge in tourism along the Adriatic coast.
Historical data shows that properties with sea views are priced higher than those without. In Northern Dalmatia, for example, sea-view properties cost about €660 more per square meter, and in Istria, the surcharge is even higher at €840 per square meter. This price difference highlights the premium that buyers are willing to pay for the scenic views and the unique lifestyle that comes with owning a sea-view property.
Real estate market reports have consistently highlighted the premium on panoramic views, noting that coastal regions are experiencing higher rates of price increase compared to inland areas. This is due to a combination of factors, including tourist demand and government investment in coastal infrastructure, which have made these areas more attractive to both domestic and international buyers.
Consumer surveys and expert opinions from real estate agents further emphasize the desirability of sea-view properties. The allure of the Adriatic coast, with its stunning views and serene environment, makes these properties highly sought after. This preference is reflected in the high-value sales of luxury properties, such as villas in Rogoznica and Murter, which are priced in the millions and feature breathtaking sea views.
Sources: Panorama Scouting, CEPAL Repository, Croatia Property Sales
4) Prices will rise on historically significant islands as more foreign buyers show interest
In recent years, we've seen a noticeable increase in property prices on historically significant islands like Hvar and Brač. These islands, known for their ancient towns and cultural heritage sites, have become increasingly appealing to foreign buyers who value cultural heritage.
In 2022, foreign buyers, including Slovenians, Austrians, and Italians, showed a strong interest in Croatian real estate, with many transactions occurring on these historically significant islands. The Croatian government's incentives, such as tax credits and free leases for inactive properties, have further fueled this interest.
Real estate market analyses have predicted continued growth in these areas, driven by foreign buyers who appreciate the islands' historical and cultural attractions. Additionally, historical preservation efforts have enhanced the appeal of these islands, attracting both tourists and investors.
Sources: Croreal, Connecting Region
5) Demand for homes with private docks will grow as boating becomes more popular
Boating is becoming a popular lifestyle choice in the Croatian Islands.
With more people embracing this lifestyle, the average booking rate for yacht and boat rentals in Croatia is climbing at nearly 8% annually. This surge in interest naturally boosts the demand for properties that cater to boating enthusiasts.
Significant upgrades at places like the Dubrovnik marina are making a splash. These improvements not only allow for larger ships but also centralize services for vessel maintenance, making boating more accessible and appealing. Such developments are often backed by government initiatives to promote nautical tourism, which can further increase the demand for properties with private docks.
Real estate agents are noticing a trend: more inquiries for properties with sea views and proximity to the coastline. This includes waterfront properties and those with private docks, indicating a growing interest in such features.
Testimonials from real estate agents reinforce this trend, highlighting the increased demand for waterfront properties. This aligns with the idea that boating is becoming a popular lifestyle choice in the Croatian Islands.
Sources: Global Property Guide, Yacht Rent, Total Croatia News, Avison Young
Get to know the market before you buy a property in the Croatian Islands
Better information leads to better decisions. Get all the data you need before investing a large amount of money. Download our guide.
6) Demand for smaller, manageable properties on Croatian islands will grow as the population ages
By 2023, 22.82% of the Croatian island population was aged 65 and above, according to the World Bank.
As people get older, they often look for smaller, easier-to-manage homes. This is because maintaining a large property can be tough with age-related physical limitations. Plus, many prefer a simpler lifestyle with less upkeep.
Real estate on the islands is catching on to this trend. There's been a noticeable uptick in listings for smaller homes, like those on Mali Komsać and Ceja, which are about 1.2 acres each. This shift shows a growing demand for properties that suit the needs of older adults.
Interestingly, the life expectancy gap between islanders and mainlanders is shrinking, meaning islanders are aging similarly to mainland residents. This suggests that the need for smaller, more accessible homes will likely rise as the island population continues to age.
For those considering buying property on these islands, it's worth noting that the aging population is driving a shift in housing preferences. Smaller, more manageable homes are becoming more popular, aligning with the needs of older residents.
So, if you're thinking about investing in island real estate, keep in mind that the demand for smaller properties is on the rise, thanks to the aging demographic.
Sources: Trading Economics, World Bank, Island Seeker
7) Luxury villa prices on the southern islands will drop as the market becomes oversaturated
In recent years, the luxury villa market on the southern Croatian islands has been experiencing a significant increase in inventory levels. This is largely due to the expansion of luxury villa rentals, such as Villa Carlotta, which has undergone renovations to support year-round operations, thereby adding to the supply of luxury properties.
Despite the strong financial performance of the luxury villa sector in Croatia, there have been signs of a slowdown in sales volume. For example, while the number of new dwellings sold in Croatia rose by 25.9% in the first half of 2023, this growth was not consistent across all regions. In some areas, demand increased strongly, but in others, like Zagreb, demand remained steady, with indications of a decline in foreign demand for residential real estate.
Real estate agencies have also reported a slowdown in luxury property demand, with the Croatian property market ending with stagnation at the end of 2024. This was evidenced by a decline in the number of transactions completed and a general slowdown in overall price growth. Additionally, luxury villas are taking longer to sell, suggesting a potential oversupply in the market.
Sources: Global Property Guide, Business Insider, Total Croatia News
8) Properties with charging stations will become more desirable as electric vehicles become more popular
The rise of electric vehicles (EVs) has been remarkable, with 2023 seeing nearly one in five cars sold globally being electric. This trend continued into 2024, highlighting a significant shift in consumer preferences towards more sustainable transportation options.
In Croatia, the government has committed to investing EUR 200 million in EV charging infrastructure by 2030. This investment aims to meet EU regulations and increase the share of renewable energy sources in transport, making properties with charging stations more appealing to eco-conscious buyers.
Consumer surveys have shown a growing preference for properties with EV charging capabilities. As more people become aware of the environmental benefits of EVs, they are increasingly seeking homes that support sustainable living, driving up the desirability of such properties.
Media coverage often emphasizes the convenience and future-proofing of homes with EV chargers. This coverage, combined with the trend towards sustainable living, suggests that properties equipped with charging stations will continue to attract interest from potential buyers.
Sources: IEA, Balkan Green Energy News, Statista
We made this infographic to show you how property prices in Croatia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Stricter building codes will slow down and increase the cost of new developments
The introduction of stricter building codes in Croatia, especially on the islands, is expected to impact both the cost and speed of new developments. One of the main reasons is the rising construction costs due to compliance with new regulations. For instance, the new law effective from January 1, 2025, bans the installation of air conditioners and satellite dishes on street-facing facades if they are visible from the street. This regulation aims to improve the aesthetic appearance of urban buildings, but it also means developers will need to find alternative solutions, which could be more expensive.
Additionally, the law tightens rules on building modifications, such as enclosing balconies or terraces, which will only be possible with the consent of co-owners and relevant authorities. This requirement can delay project timelines as developers must navigate the process of obtaining necessary approvals. The need for more stringent compliance measures, such as obtaining consent for modifications, would necessitate additional time and resources, thereby slowing down project timelines.
Moreover, historical data from Croatia shows that previous regulatory changes have impacted development speed and costs. For example, the Long-Term Strategy to Encourage Investment in the Renovation of the National Building Stock of the Republic of Croatia by 2050 has likely influenced construction practices and costs over time. This historical context suggests that the new building codes will similarly affect current and future developments.
10) Off-grid properties will become more attractive as solar energy infrastructure develops
The development of solar energy infrastructure has been a game-changer for off-grid properties, especially in places like the Croatian Islands. In 2023, Croatia made significant strides by adding 184 MW of new solar photovoltaic plants, nearly doubling its solar capacity. This rapid growth continued into 2024, with thousands of households and businesses installing solar panels, indicating a strong interest in solar energy.
Government incentives have played a crucial role in this development. The Croatian government introduced a legal framework to support renewable energy projects, making it easier for people to invest in solar energy. This support has encouraged more installations, particularly in remote areas where traditional grid connections are less reliable.
Moreover, the decreasing costs of solar technology have made it more affordable for households to adopt off-grid solar solutions. This affordability, combined with the benefits of energy independence and cost savings, has made solar energy an attractive option for those looking to live sustainably.
Sources: PV Know How, Argus Media, Croatia Week, World Bank, PV Magazine
11) Incentives for restoring historical properties in Croatia will influence investment decisions
The Croatian government is likely to introduce incentives for restoring historical properties due to the rising interest in cultural heritage tourism. In recent years, the number of tourists visiting historical sites on Croatian islands has been increasing, particularly in areas like the Istrian peninsula, which is known for its rich cultural heritage.
Government reports have highlighted the economic potential of heritage tourism, with significant funding allocated to cultural heritage protection projects. For example, the EU Solidarity Fund provided EUR 683.7 million to address earthquake damage in Zagreb, including projects for cultural heritage protection.
Successful case studies have shown that restored historical properties can boost local economies. The renovation of buildings in Zagreb, funded by the EU Solidarity Fund, demonstrates the government's commitment to preserving cultural heritage and its economic impact.
Sources: EU Solidarity Fund, Globe Newswire, UNESCO
Buying real estate in the Croatian Islands can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
12) New regulations will boost multi-family unit development, changing available property types
In recent years, the Croatian government has recognized the pressing need for more affordable housing, especially in coastal regions where renting has become increasingly unaffordable. This has led to new regulations that favor the development of multi-family units, which are seen as a solution to the housing affordability crisis.
One of the key reasons for this shift is the government's focus on demographic renewal and supporting families. Programs like "Sritna dica, sritan grad" in Supetar highlight the need for increased housing density to accommodate growing families. This aligns with global urbanization trends, where more people are moving to cities, increasing the demand for multi-family housing.
Additionally, the Croatian government has been investing in infrastructure to support higher density living, such as state incentives for renovating facades and installing lifts in protected areas. These economic incentives make it more attractive for developers to build multi-family units, which are also seen as environmentally beneficial due to their efficient use of resources.
Sources: Total Croatia News, Croatia Week, Croatia Week, The Business Research Company
13) Waterfront properties on some islands will become less desirable due to coastal erosion concerns
Coastal erosion is a growing concern for waterfront properties on certain islands, particularly in Croatia. In recent years, the Croatian coastline has been identified as vulnerable to erosion, especially with the projected sea level rise. Although a 20 cm rise may not directly cause erosion, it can lead to flooding in low-lying areas, impacting small beaches and economic activities like tourism and agriculture.
The situation is exacerbated by the increased frequency and severity of storms, particularly in the northern Adriatic coast. These storms, intensified by the shallow sea and the meeting of hot and cold air masses, can cause significant damage to coastal areas. Additionally, the Adriatic Sea has been warming at an alarming rate, with the top layer increasing by 1.8 degrees Celsius over the last six decades. This warming trend is expected to continue, with sea levels potentially rising by about one meter by the end of the century.
Government warnings about vulnerable coastal zones have led to the development of integrated coastal zone management plans to mitigate these risks. However, the expected sea-level rise will still enhance the risk of flooding, coastal erosion, and loss of low-lying coasts. This has likely contributed to a decline in waterfront property values, as potential buyers become more cautious about investing in properties prone to erosion.
Sources: Climate Change Post, Sea Help, Total Croatia News, Adriadapt
14) Younger buyers will drive demand for homes with shared community spaces, shaping new developments
In recent years, we've seen a growing interest in co-living spaces among younger generations. This trend is evident in the increasing demand for sustainable and community-focused living environments. For example, in urban areas, co-living projects have successfully provided communal amenities that foster social connections and shared experiences.
Surveys have consistently shown that millennials and Gen Z value community and shared experiences over traditional living arrangements. This preference is reflected in their interest in properties with shared community spaces. Additionally, there is noticeable growth in real estate developments featuring communal amenities like shared workspaces, community gardens, and social areas, catering to the needs of younger generations who prioritize social connections and community engagement.
Social media trends also highlight the benefits of communal living, with platforms like Instagram and Facebook showcasing co-living spaces and shared workspaces. This further emphasizes the appeal of these spaces to younger generations. Moreover, demographic studies show that younger generations prioritize social connections and community engagement, providing insights into their changing residential preferences.
Sources: Emerald Insight
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Croatia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Demand for traditional stone houses will grow as buyers look for authentic island experiences
In recent years, there has been a noticeable shift in what tourists and homebuyers are looking for when they visit or invest in the Croatian Islands. According to the 2023 Booking.com Sustainable Travel Research Report, a significant 75% of tourists are now seeking authentic experiences that truly represent the local culture. This trend has been growing, as people increasingly value genuine cultural experiences over generic ones.
Traditional stone houses, which are a key part of the Istrian identity, offer exactly this kind of authentic experience. These houses are not just buildings; they are a piece of history and culture, and their preservation is crucial for maintaining the cultural heritage of the region. The Croatian government has recognized this and offers incentives for preserving historical architecture, which encourages the restoration of these charming stone houses.
Moreover, the real estate market has seen a growing number of listings featuring traditional stone houses, especially in regions like Istria. These houses are highly sought after for their traditional Mediterranean architecture, which adds to their charm and appeal. Media coverage and social media trends have also played a role in highlighting the charm and historical value of these stone houses, further increasing their popularity.
Sources: Total Croatia News, Mize Tech, Croreal
16) Demand for larger homes with flexible layouts will grow as multi-generational living becomes more popular
In recent years, the trend of multi-generational living has been gaining momentum, and this is expected to continue in the future. One of the main reasons for this is the aging population in Croatia. As of 2023, 22.9% of the population was 65 years or older, which means more families are looking to live together to support their elderly members.
Additionally, there is a strong cultural tradition in Croatia of family cohabitation. This cultural context naturally supports the idea of multiple generations living under one roof. As a result, there is a growing demand for homes that can accommodate this lifestyle, which often means larger homes with flexible layouts.
Moreover, consumer preferences are shifting towards homes that offer both privacy and communal living spaces. This is because families want to ensure that each generation has its own space while still being able to come together in shared areas. This preference is driving the demand for adaptable home designs.
Real estate market reports have also shown an increase in the demand for larger homes in Croatia. Companies like Karmod are responding to this need by offering modular social housing solutions that are both affordable and adaptable, catering specifically to multigenerational households.
Sources: Demographics of Croatia, Affordable Social Housing in Croatia, The Rise of Multigenerational Homes
17) Interest in smaller, efficient homes will grow as minimalism becomes more popular
Minimalism is making smaller, efficient homes more appealing to potential buyers.
In North America, the trend is clear: tiny homes are becoming a major part of the housing market due to their affordability compared to traditional homes. This shift is not just about cost; it's about embracing a lifestyle that values simplicity and efficiency. Meanwhile, in Croatia, modular and prefab homes are gaining popularity for their sustainable and efficient designs, aligning with the minimalist movement.
Interestingly, many tiny homeowners are over 50, showing that even baby boomers are catching on to the minimalist wave. Downsizing is not just a trend for the young; it's a practical choice for those looking to reduce their living space and simplify their lives.
The media has played a significant role in this shift by showcasing the benefits of minimalism. Reduced waste and lower energy consumption are just a couple of the perks that have been highlighted, making the minimalist lifestyle even more attractive.
As more people become aware of these benefits, the demand for smaller, more efficient homes is expected to rise. This is not just a passing trend; it's a movement towards more sustainable living. The tiny homes market is set to grow significantly, reflecting a global shift in housing preferences.
Sources: PR Newswire, Today's Homeowner, Karmod
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.